Inequality is decreasing: households in the Eurozone are becoming significantly richer

Inequality is decreasing: households in the Eurozone are becoming significantly richer

According to a report by www.kleinezeitung.at, households in the eurozone have become significantly richer over the last five years. Household net wealth increased by 29 percent, with inequality decreasing slightly. A key reason for this is that homeowners, who make up more than 60 percent of the population, benefited from increased property prices. The European Central Bank (ECB) attributes this to the ultra-low interest rates and the resulting real estate boom.

The trade association of real estate and asset trustees in the Chamber of Commerce rejects the expectation of a price reduction. This is particularly unlikely in the privately financed property segment, as the combination of high construction costs and sharply increased interest rates has meant that many people can no longer afford condominiums despite good incomes.

Despite slight price increases for new apartments, the number of apartments completed annually is expected to decline nationwide by 2025. This shortage is expected to lead to further rising prices. Although the wealth of the richest five percent of households has fallen slightly, they still hold 43 percent of the total net worth. The situation highlights a growing gap between property ownership and renting.

These developments indicate that the Eurozone real estate market remains in troubled waters. The increasing demand for housing combined with limited new construction projects and a strong influence of interest rate policy are expected to cause prices to continue to rise. Access to affordable housing could become increasingly difficult, especially for potential buyers who do not own real estate. It is therefore advisable to continue to monitor the market closely.

Source: www.kleinezeitung.at