Why are house prices rising amid the worst economic crisis since WWII?

The state of the housing market tends to be a good indicator of what’s on the horizon for the economy: a sharp drop often follows a crisis, or is a signal of an impending one. But as the novel coronavirus disease pandemic inflicts the biggest economic downturn since World War II, European house prices, far from dipping, have continued to rise.

In the European Union, property valuations were 5.2 percent higher in the second and third quarter of 2020 compared with the previous year. In the UK, which is experiencing the worst economic slump on the continent, house price growth hit a four-year high.

So why have they kept on growing? Are the figures really representative?

Paul Cheshire, an emeritus professor of economic geography at the London School of Economics, said, “I made this prediction that house prices would fall back in April because of the expectation of the effects of COVID-19 on personal incomes and the economy.”

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