Property prices are going up in most major European economies, according to a fresh analysis by Standard & Poor’s.
The boom results from the exceptionally low interest rates prevailing and those rates are reportedly being passed on to consumers.
Consequently, buyers are able to borrow more money to fund larger properties and this in turn is pushing up prices.
The agency predicts that prices in Portugal and Spain should rise by 2.5%.
Prices in Italy are likely to climb by a more reserved 1.5% but French housing prices are set to remain flat for the year.
The British housing market has not been shy and expectations are for it to further escalate by 5% in 2016. Similar price hikes are anticipated in Germany and Ireland, according to the report’s predictions.
Standard & Poor's found the average mortgage interest rate fell from 2.55% in December 2014 to 2.28% in December 2015. The rate could decline further if the European Central Bank keeps its monetary easing policy, which it is under pressure to do.
"We expect the ECB's accommodative monetary stance, leading to historically low sovereign bond yields and mortgage interest rates, will spur improvements in all housing markets," said economist Sophie Tahiri at Standard & Poor's.
"Many property markets are nevertheless susceptible to global economic headwinds that could dampen the fragile economic recovery and have a knock-on effect on house prices, especially in the periphery countries."
Central to the predictions will be a country’s economic growth and the continuation of cheap lending. This may prove not to be the case as recession appears to be an ever-present danger, particularly in southern eurozone countries.
S&P reported that real GDP was up 1.5% in the eurozone last year and 2.2% in the UK.
Other analysts took a less rosy picture. Credit Suisse reported that the eurozone grew by just 0.3% in the final quarter of 2015, despite the money pouring into the economies from the ECB and the low price of oil.
GDP in the euro area remains lower than its pre-crisis peak, unlike those of the US and UK.
