It has been a highroad roller coaster ride for house owners and tenants in Europe in 2017. House prices continue rising and many fear that the light at the end of the tunnel might be far off and opt to apply for a Bolån or house loan to pay off the soaring prices. But what are the factors that influence the rise of the housing market and who with this impact housing prices in 2018? Here are a few factors to take into consideration:
Interest rates will stay low
Although a few price hikes are to be expected, house owners and tenants won’t really feel these hikes as they should be within the range of only 0.25% to 0.75%. For some, it may seem like a small percentile but for others, it might mean being able to purchase a home or not. As the year progresses, there are fewer hikes expected and although house prices are still high, it might still feel like a heavy burden to carry.
The rate of housebuilding will rise
The European government has set out a certain amount of homes to be built by the end of 2018. With the financial crash and the cost of houses, it is not guaranteed that enough houses will be built within the set time. The economy is quite weak and that impacts the rate of house building by a huge amount.
First-time buyers will are increasing
Taxes are rising and this will cause home buyers to be more prone to purchase a house while property speculators will retreat in 2018. The buy-to-let option for landlords will see a decrease as in 2015 it stood at about 150 000 and is expected to drop to about 80 000 in 2018.
The debate on whether tenants will find relief
It is not certain whether tenants will be able to experience some relief in 2018 but they should be able to feel more pennies in their pockets after paying rent each month. This should also spark some new life in first-time buyers. In 2017, rent prices rose by about 1% and although this seems like a small percentage, European salaries are still under a huge amount of strain as inflation is quite high.
Skyscrapers still continue reaching for the sky
When talking about the rich, it is evident that 56 storeys of building and more will lead to a lot of strain over prices. With at least two new skyscrapers being built over the course of the next few years, one can only imagine what the price tag on these buildings will be.
While taking the above-mentioned points into consideration, it can be said that homeowners still need to keep all their pennies close as relief is still a little way off. Although they can slowly start blowing off some price increase steam, the roller coaster ride still isn’t over. It might be slowing down but making a stop or coming to a halt isn’t being expected as yet.