Economics: Housing: the core eurozone problem

We’re increasingly confident about the outlook for housing 

One part of the outlook that we are increasingly confident about is housing. Mortgage lending has decelerated sharply, building permits have rolled over in a broad-based manner, and construction sector confidence remains muted.

A decline in residential investment (perhaps a big one) seems likely 

All of that suggests that a decline in residential investment is likely this year. A 10% decline (on par with the global financial crisis) can’t be ruled out. That would knock three-quarters of a percentage point off eurozone GDP growth.

Germany, France, and the Netherlands at the forefront so far 

So far, Germany, France, and the Netherlands are at the forefront rather than the periphery. That’s notable because those countries spend more on residential investment, and some have been flagged as susceptible to house price corrections.