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Sunday, October 21, 2007

The Housing Bust Hits Europe

by Calculated Risk on 10/21/2007 06:55:00 PM

WSJ: Europe Feels Housing Chill

The real-estate slowdown that hit the U.S. is spreading to Europe.

Home prices in some of Europe's hottest markets are falling after a decade of double-digit-percentage price increases. The reasons resemble those across the Atlantic: higher interest rates, faltering confidence and tighter lending standards.
Home prices in Spain more than doubled over the past 10 years, but the average price of an existing home has fallen slightly since July, according to real-estate agent France experienced its first quarterly home-price decline in nearly a decade in the third quarter, according to its federation of real-estate agents, while Irish house prices in August were 1.9% below the year-earlier level.

The weakening home market could hit European economies. An expanding construction industry has fueled growth in Europe. Now, construction in Spain and elsewhere is easing. ...