After the boom years of soaring house prices, the European housing markets appear to have stabilized and are generally sheltered from the fallout of the US subprime mortgage crisis, analysts said.
Far from the alarmist warnings of a looming crash when the industrialized world's house prices kept climbing, economists now see the housing market headed for a soft landing with only some collateral damage in the conditions for credit.
In Europe, "for the moment, there are no negative effects on the housing market from the subprime [mortgage] crisis" in the US, said Michel Varaldo, a real estate analyst for Societe Generale, adding that any effects are indirect and related to banks' profit margins in lending money.
US home loan woes sent stock exchanges worldwide reeling this month as US borrowers with risky credit histories -- the so-called subprime sector -- faced with falling house prices and rising interest rates defaulted on their mortgage repayments.
According to the experts, that scenario is not likely to happen in Europe where the conditions for borrowing money are usually tougher and the demand for buying homes remains strong.
The most vulnerable European countries are Spain and Britain where the overheated housing markets of the past few years and the types of mortgages offered make them more susceptible to the effects of higher interest rates and the risks of indebtedness.
Also Spanish and British borrowers will likely see an increase in their monthly home loan payments as many have variable rate mortgages subject to the rising interest rates in Europe.
Still, the hot Spanish and British housing markets are cooling slightly with a slower pace of price increases, economists say, and they are far from a crisis as the demand for housing is unabated in Spain and in Britain the high-employment economy underpins the housing sector.
Elsewhere in western Europe, the French housing market appears not to be facing any serious concerns.
"The French housing market is not at all organized like the American market. The fundamentals are good -- there are not enough homes [for sale] and the demand is strong," said Bernard Cadeau, president of the Orpi network of real estate agencies.
The only possible negative effect could be a tightening of credit by the banks, or still higher interest rates, said Michel Mouillard, an economics professor at the University of Paris X.
"If the central banks continue to inject liquidity but do not lower interest rates like they did in September 2001, there is a fear that the housing markets could be hard hit," Mouillard predicted.