ECB expects moderation in eurozone housing market growth

The rise in euro zone house prices is likely to slow as the market's cycle is relatively mature, but labour shortages could mitigate any such moderation, the European Central Bank said in an economic bulletin article on Tuesday. House prices are not yet above their fundamental levels but as they are already higher than pre-crisis levels after a four-year upturn and economic growth is slowing, the expansion in the property market is also expected to moderate, the ECB said.
With the ECB keeping interest rates at a record low for years, some policymakers are concerned that it could fuel a property bubble, which may burst once rates are raised, leading to yet another crisis for the bloc. ECB banks supervisor Daniele Nouy recently argued that the property market may be the source of the next crisis, even if she could not predict how it would start.