House prices are expected to fall “in the coming months”, ratings agency Moody’s predicts and reportsECHO. But even so, the fall in prices “will still not be enough to make housing affordable in most European capitals”, especially for first-time homebuyers. In Lisbon last year it took just over 15 years of wages to pay for a house. And for a real estate loan to become affordable, the value of real estate must fall by 16.85%.

According to the North American agency, over the past 18 years, house prices in Lisbon were at their lowest between 2012 and 2016, when it took a maximum of ten years’ salary to pay for a house.

“The number of years of wages needed to pay for housing in most European capitals has increased over the past decade, with major cities hitting 17-year lows in affordability,” Moody’s warned in an Investors Service report outlining the European housing scenario. The exceptions are Dublin, Madrid, Stockholm and Rome, the agency emphasizes.

In Paris, for example, “even if it takes more than 15 years of salary to pay for a house, the trend has been decreasing since 2020,” we read in the document, according to which Amsterdam and London remain the least affordable. European capitals for those looking to buy a home, but “other cities such as Berlin, Frankfurt, Lisbon and Milan have seen a decline in the supply of affordable housing in recent years.”

Moody’s analysis also said that “despite falling house prices and rising wages, the ability to repay a home loan remains weak in most major European cities due to the loss of disposable income” of households, leading to “increasing costs of living and interest rates” . “

In this scenario, the price drop expected in 2024 “will not be sufficient to make prices affordable,” the document emphasizes. For this to happen and “restore the average loan repayment capacity of every European city between 2010 and 2022”, house prices would need to fall by around 31.51% in Frankfurt, 29.58% in Berlin or 24.60 %. % in Amsterdam, where the largest drop is observed.

In Lisbon, prices will have to fall by 16.85%, then in Stockholm, where a drop of 16.68% will be required. In Madrid the fall will be 6.74%, in Paris 7.65% and in Milan 8.10%. Rome is the only European city that does not require a value adjustment to keep houses and mortgages affordable.