More eurozone consumers are struggling to pay their housing costs as inflation exceeds years of target and soaring borrowing costs, according to a European Central Bank study.
ECB researchers Omilos Koubavas and Digislava Rusinova said in a breaking news article on Monday that the proportion of low-income households expecting to be late in paying their utilities and rent will increase in the first quarter, up from around 15% in 2023. said it had risen to more than 20%. Mortgage payments almost doubled to 30%.
There are no buyers even for affordable apartments.
“Given the current and future impact of the loss of purchasing power due to rising interest rates and inflation, the ability of households to cover housing-related costs and mortgage payments is a cause for concern,” the article said.
Interest rate hikes aimed at curbing inflation have especially weighed on the real estate market, where new investment has declined. This has increased pressure on rents, which were tightening in many European cities even before inflation soared.
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The ECB is likely to start cutting interest rates in June, with several Governing Council members and many politicians in the region concerned that tight monetary policy is holding back the 20-nation economy too much.
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