English 
Monetary policy, consumer prices, interest rates and the economy have caused asset prices in the euro zone to fall by -0.8% in 2022. This is the first price drop in almost 10 years. However, price developments in the euro countries are divergent. While asset prices in Greece and Portugal still increased strongly, they have already fallen significantly in Germany and Finland.
The Flossbach von Storch Wealth Price Series for the Euro Area measures the price development of assets owned by private households in selected Eurozone countries (Austria, Belgium, Finland, France, Germany, Greece, Italy, the Netherlands, Portugal and Spain). The price index for the Eurozone and for the individual countries is calculated as the weighted price development of tangible assets (real estate, business assets, durable consumer goods as well as collective and speculative goods) and financial assets (savings deposits, shares, bonds, other financial assets). The index for Germany included in the FvS Wealth Price Series for the Euro Area differs from the FvS Wealth Price Index for Germany, which is published separately on a quarterly basis, due to the availability of comparable data in the Eurozone.
After following an upward trend for almost ten years, asset prices for private households in the Euro area have now passed a temporary high. At mid-year 2022, the FvS wealth price index for the Euro area peaked and then fell slightly in the third and fourth quarters. At the end of the year, the year-on-year growth rate was -0.8%. Compared with the mid-year peak, asset prices at the end of the year are -1.6% lower.
The upward trend in asset prices, which had lasted for almost a decade, had been boosted by the expansionary monetary policy in the Euro area, as a result of which asset price inflation reached record levels of almost ten percent in the meantime. The turnaround in asset price development is in turn closely linked to the turnaround in monetary policy. The monetary and fiscal policy relief measures of the Corona pandemic gave a boost to consumer price inflation, which came up against an already very expanded money supply and was additionally reinforced by the economic consequences of the global lockdowns and the war in Ukraine. Both the European Central Bank and other major central banks responded to consumer price inflation and the rise in market interest rates by raising their policy rates. In addition, rising consumer prices and high energy costs fueled fears of an impending recession. The combination of effects led to falling prices for Euro area household asset prices.
While asset price inflation declined in the aggregate of all Euro area countries, the range in the cross-section of countries is high. It ranges from -6.4% in Germany to +12.6% in Greece.
Real assets account for the bulk of the total assets of the average household in the Euro area and have a decisive impact on the development of the overall index. At the end of the year, prices for real assets were -0.4% lower than at the end of the previous year. The high point was already reached in the middle of the year.
Real estate account for the largest share of real assets and thus also of the total assets of private households in the Euro area. Real estate prices in the Euro area peaked in the third quarter of 2022 and finally fell in the fourth quarter. At the end of the year, real estate prices were 2.5% higher than at the end of the previous year but -1.9% lower than in the third quarter. The reason for the recent drop in prices is mainly due to higher mortgage rates as a result of higher market and prime rates, which in turn are a reaction to the consumer price inflation that has emerged. The increase in costs for real estate buyers due to the now higher mortgage rates has so far not been fully reflected in the decline in the price of properties sold. This is partly due to the fact that construction and material costs are high and the supply of real estate in the metropolitan regions of the Euro area is low. In addition, property owners across the board are not subject to any major selling pressure, so that the number of transactions has fallen massively, but prices have fallen only slightly. As expected, this means that real estate prices are reacting very slowly to the changed conditions, as mortgage rates were already rising in the second half of 2021.
In contrast, prices for business wealth (privately owned companies) have reacted quickly and significantly to the changed macroeconomic environment. Due to concerns about the economy in the euro area countries, business wealth peaked as early as the third quarter of 2021. At year-end 2022, the year-on-year decline in business wealth prices in the Euro area was -19.7%. However, part of the price development has leveled out again as of April 2023, as business wealth prices have partially recovered in the period September 2022 to April 2023.
Euro area consumer durable prices continued to reflect problems in global supply chains and the war in Ukraine in 2022, resulting in year-end prices 7.4% higher than at the end of the previous year. In contrast to the previously mentioned goods, prices for consumer durables started to rise as soon as the corona pandemic began, and the increase picked up speed throughout.
Likewise, collectibles and speculative items enjoyed high demand from the start of the pandemic, as their attractiveness as investment assets increased in times of economic uncertainty. At the end of the year, prices for collectibles and speculative items were +8.9% higher than at the end of the previous year. Within the category, the price increase for art objects (+22.4%) was particularly strong in the period.
As only a small proportion of the real assets of private households in the Euro area consists of consumer durables and collectables and speculative goods, the price development of real assets is being driven by the turnaround in prices for real estate and business assets.
At the end of the year, the price of financial assets held by private households in the Euro area was 2.8% lower than at the end of the previous year. Within financial assets, there were different developments, as the individual categories reacted differently to the changed conditions.
The prices of bonds held in the portfolios of private households were 16.5% cheaper at the end of the year than at the end of the previous year. The reason for the record drop in prices was the global rise in consumer price inflation, to which the central banks responded by increasing key interest rates. The creditworthiness of many issuers also fell as a result of the economic situation. In the fourth quarter, consumer price inflation was below expectations and the central banks' interest rate steps became smaller, which stabilized prices on the bond markets.
At the end of the year, prices for the equity assets of private households in the Euro area were -9.5% lower than at the end of the previous year. Whereas prices fell in each of the first three quarters, share prices recovered within the fourth quarter and rose slightly again, somewhat mitigating the price decline over the year. The reason for the price development on the stock markets was initially the emerging consumer price inflation, the associated uncertainty about a future recession and the increase in key interest rates in the Euro area and the USA. As the narrative of a rapid sharp recession towards the end of the year failed to materialize, the stock markets stabilized again in the fourth quarter.
The price of other financial assets, which is measured by the prices of gold and commodities traded on the stock exchange, showed the highest price increase of all assets compared with the end of the previous year at +13.8%. This is due to commodity prices, which rose +29.2% year-on-year, but fell -6.7% in the most recent quarter following their record high in the summer. The record prices for commodities are directly related to problems in global supply chains, so that high demand meets low supply. At the end of the year, the gold price was up +7.2% compared with the end of the previous year. The peak price was reached in the first quarter and subsequently fell in each of the three quarters.
Prices for savings and demand deposits remain unchanged by definition.
The development of asset price inflation over the past calendar year differs across the individual countries of the Euro area. The reason for the difference in the cross-section of countries is mainly to be found in the price development of the national real estate markets. In the southern countries of the Euro area, asset price inflation for 2022 ranged between +0.0% and +12.6%.
In Greece and Portugal, asset price inflation is very high at +12.6% and +9.8% respectively at the end of the year. This development is being driven by prices on the real estate markets, which rose by +13.0% and +11.3% year-on-year despite higher interest rates, and did not fall even in the fourth quarter.
In Spain, asset prices rose in the first three quarters of the year and finally stagnated in the fourth quarter, ending the year +4.5% higher than at the end of the previous year. Real estate prices in Spain fell slightly in the fourth quarter, but had still risen strongly in the previous three quarters, so Spanish real estate remained more expensive than at the end of the previous year.
In Italy, asset prices stagnated in 2022 (+0.0%). While Italian real estate still saw high price growth for the national real estate market in 2021 and the first half of 2022, asset prices fell in the second half of the year. At the end of the year, prices for Italian real estate were still slightly higher (+2.8%) than at the end of the previous year.
Asset price inflation in the northern countries of the Euro area was between -6.4% and +3.3% in the past year.
In Germany, prices fell by -6.4% in the past calendar year. As in the other countries, this development was driven by prices for German real estate, which became -3.6% cheaper in the course of the year.
The assets of Finnish households suffered a price decline of -3.9%. Real estate prices in Finland fell from the middle of the year and were -2.3% cheaper at the end of the year than at the end of the previous year.
In France, asset prices at the end of the year were slightly lower than at the end of the previous year (-0.3%). The decline in prices was somewhat milder, as real estate prices continued to rise into the third quarter and only fell slightly in the fourth quarter. Compared with the end of the previous year, prices for French real estate were therefore still +4.9% higher. In Belgium, price developments on the real estate markets followed the same path. In the end, however, asset price inflation in Belgium was slightly higher year-on-year at +0.6%, as real estate has a higher weight in the national index.
Positive asset price inflation rates were recorded for the Netherlands (+3.0%) and Austria (+3.3%). Although real estate prices also fell slightly in the fourth quarter, asset price inflation at the end of the year was higher than in the other northern countries due to the somewhat better price development of business assets.
Consumer price inflation has caught up with and overtaken asset price inflation in the Euro area. For the monetary union as a whole, consumer goods price inflation as measured by the harmonized index of consumer prices (HICP) was +8.9% at the end of the year compared with the end of the previous year. In the southern countries of the Euro area, it was +9.1%, higher than in the northern countries (+8.8%).
