Insufficient housing supply remains a challenge.
Insufficient housing supply remains a challenge.

EC Predicts Euroland Housing Costs to Rise Sharply

EC Predicts Euroland Housing Costs to Rise Sharply

House prices and rents will continue to rise as the economy continues to expand rapidly in the next two years boosted by house building, the European Commission has predicted.
Its new forecasts project that gross domestic product will grow rapidly, by 4.8% this year, and then 3.9% and 3.1% in 2018 and 2019, Reuters reported.
Shorn of the accounting distortions caused by multinationals involving contract manufacturing and intellectual property transfers, the underlying economy driven by consumer spending and construction will power ahead, by an average of 4% to 2019, the commission projects.
Without providing specific forecasts, the commission signaled that housing costs would likely rise sharply. “Insufficient housing supply remains a challenge and is expected to show up in house prices and rents,” it said in the autumn forecasts.
“Investment in construction is projected to contribute substantially to growth in domestic demand, with strong momentum in residential property investment in 2016 expected to continue in the medium term, supported by government policies,” the commission said.
A number of forecasters such as the Economic and Social Research Institute have warned about the potential for the huge increase in housing construction to destabilize the economy over the coming years. The ESRI has said, however, that the economy was not at present overheating.
The specter of Brexit looms large over the commission’s forecasts. It warns that uncertainty about the eventual deal between the UK and the EU and “potential changes to the international taxation environment and US tax and trade policies” could weigh on government revenues.
The commission forecasts Irish prices as measured by its harmonized index will rise only slightly over the coming years. Prices will rise 0.8% next year and 1.2% in 2019, it predicts.
Jobs growth will continue at a fast pace, helping push the average annual rate of unemployment to 5.5% next year and to 5.3% in 2019. The commission said growth in the eurozone will expand 2.2% this year, up from 1.8% in 2016. In May, the commission forecast 2017 growth at 1.7%.
“The European economy has performed significantly better than expected this year, propelled by resilient private consumption, stronger growth around the world, and falling unemployment,” the commission said.
“Investment is also picking up amid favorable financing conditions and considerably brightened economic sentiment as uncertainty has faded,” it said. Growth in 2018 is to slow to 2.1% and to 1.9% in 2019.

Short URL : https://goo.gl/5g1pMJ
  1. https://goo.gl/YpNu66
  • https://goo.gl/dCm8zR
  • https://goo.gl/GtC4Z8
  • https://goo.gl/KSnst8
  • https://goo.gl/Y1xHz7

You can also read ...

Riyadh Going After  Non-Arrested Princes
Political analyst Jamal Khashoggi has said that Saudi Arabia...
Wage growth in Australia has fallen  dramatically in recent years.
The Reserve Bank of Australia says relentless cost cutting by...
No Sign Philippines Economy Overheating
The chief of the Bangko Sentral ng Pilipinas said the...
Shadow financing is seen as one of the culprits behind China’s property-price surge, and regulators have banned  private-equity lending to developers for land purchases.
China’s drive to reduce its debt burden has shifted into a...
Confidence in Afghanistan’s Future Rising Slowly
Afghanistan’s economy is expected to grow 2.6% this year, up...
China’s Tencent Overtakes Facebook in Market Value
China’s social media and video game giant Tencent overtook...
Malaysia Growth Robust
Malaysia’s economy should continue to grow at a decent pace...
Supporters of the bill describe the change  as a boon for small business owners.
Lawmakers who sped a bill through the US House last week may...

Add new comment

Read our comment policy before posting your viewpoints

Enter the characters shown in the image.