House prices back to strong growth in CEE

This week, Eurostat released house price data for the last quarter of 2024. The rate of annual house price growth is increasing or is already at very high levels throughout the CEE. The sole exception is Romania, where the annual house price growth in Q4 2024 was 4%, currently below the EU average of 4.9% y/y, representing a slowdown compared to the first half of the year (6.1% y/y). The rate of growth also decreased in Croatia, Hungary, and Poland; however, annual price increases remain in double digits in all three countries. The slowdown in Poland is the most pronounced, following the coalitions failure to agree on reintroducing a subsidized mortgage scheme for first-time buyers. Growth rates in Czechia (8.4%), Slovenia (8.5%), and Slovakia (7.9%) are also slowly approaching double digits. These increases are predominantly due to declining mortgage rates as monetary policy conditions are being relaxed. In our view, house prices are expected to continue rising, largely dependent on central banks decisions within the region.