All over Europe the housing markets in cities and regional locations are showing impressive growth rates, according to Catella Research. People continue to move to cities and urban centres, rents and purchase prices are rising and yields are falling, the firm says.

But in spite of this “perfect storm”, from an investor’s point of view, the recent good performance for residential housing is putting more pressure on governments around Europe to increase the supply of affordable housing.

Catella Research said: “Never since the late 1970s has the discrepancy between rents and purchase prices been so pronounced in Europe. Urbanisation, density and land value increases go hand in hand. Once again Catella Research has analysed the residential real estate market of 59 cities in 19 countries in Europe. In addition to that, we wanted to know how big the impact of economic growth has been on residential prices and measured the share of the national GDP on the local market.

“The result is hardly surprising: In 15 countries, the capital city generated the highest GDP and consequently the prices for residential property markets are also the highest there. With the exception of Austria, Germany, Spain and Switzerland, where the residential prices in the capital are not the most expensive.”

Other important results from the Catella analysis included: