Cyprus has the smallest drop in house prices compared to other eurozone countries, based on the extreme scenario of the European Banking Authority for systemic Cypriot banks. The European Banking Authority's test of resilience of European banks launched last Friday by the European Banking Authority, the first to be carried out amid the coronavirus pandemic, shows that declining property prices are more controlled than in the rest of Europe.
The systemic banks, Bank of Cyprus, Hellenic and RCB Bank will pass the endurance exercise with the mildest fall in prices in the Eurozone. Housing prices will fall by a cumulative 4.1%, in the period 2021-2023 (1.7%, 2% and 0.4% for each year), the lowest in the Eurozone and in Europe as a whole. Specifically, the fall in house prices in the eurozone from 2021 to 2023, is estimated by the European Banking Authority to be 16.6% and in Europe as a whole will be 17%.
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In Greece, the fall in property prices is estimated to be 5.8% in 2021, 3.1% in 2022 and 1.3% in 2023 based on the extreme scenario. In Portugal, the EDF technocrats have estimated that in the extreme scenario the fall in house prices will be 19.1% in the period 2021 -2023. Luxembourg has the second largest drop in the EDF forecast. Systemic banks will pass the extreme scenario with a fall of 4.7% in 2021, 15.4% in 2022 and 10.9% in 2023 (cumulatively 31%). For the Belgian systemic banking system, the fall in house prices in the extreme scenario is estimated cumulatively at 30.1% (6.1% in 2021, 13.9% in 2022 and 10.1% in 2023).
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