EU house prices soar to record highs

Record-breaking rise in EU property prices — trend analysis and forecasts for 2025

The housing market in the European Union is experiencing an unprecedented boom — property and rental prices are breaking multi-year records. According to the latest data from Eurostat, in 2024, the average price of housing in the EU increased by 4.9% compared to the previous year, while rents rose by 3.2%. Experts attribute this trend to a combination of factors, including high demand, low interest rates and limited supply on the market.

• The rise in property prices in the EU is not a new phenomenon, but a continuation of a long-term trend. From 2010 to 2024, the average price of housing in the region increased by an impressive 55.4%. However, the growth rates vary significantly from country to country. The absolute leaders in property price increases were: Hungary +230% since 2010, Estonia +228% over the same period, Lithuania: +181%. Experts explain such a significant increase in prices in these countries by the rapid development of the economy and the influx of foreign investment in the real estate sector. At the same time, at the other end of the spectrum are countries with minimal growth or even a decrease in prices: in Cyprus, housing prices have remained virtually unchanged since 2010, while in Italy, prices have fallen by 4% over the same period — this is the only EU country with negative dynamics.
• Rent is rising in line with housing prices. Rents in the EU in 2024 increased by 3.2% year-on-year, continuing a long-term trend. Since 2010, the average rental price in the region has risen by 26%. These figures highlight the high activity not only in the housing purchase market, but also in the rental property segment. The highest growth in rental rates since 2010 was recorded in the following countries: Estonia +216%, Lithuania +183%, Ireland and Hungary more than +100%. Experts note that the main reasons for the rise in rent are the increased demand for rental housing and the overall rise in real estate prices.
• Experts highlight several main reasons that led to the record rise in housing and rent prices in the EU:

1. Supply and demand imbalance — in most EU countries, especially in large cities, the demand for real estate significantly exceeds supply. This is due to the limited land for development and increased urbanization.
2. Low interest rates — the availability of mortgage loans stimulated the purchase of housing, which, in turn, led to an increase in prices.
3. Economic stabilization — after a turbulent 2022, the economic situation in most EU countries has improved. This contributed to the influx of investment into the real estate sector, especially in the long-term rental housing segment.

• Real estate price dynamics vary significantly from region to region. The Baltic countries — Estonia, Latvia and Lithuania — are leading in terms of growth rates of both housing and rent prices. Experts attribute this to rapid economic development, an influx of investment, and increased demand for real estate in these countries. At the same time, some Western European countries faced a cooling market in the second half of 2024. For example, in France, Luxembourg, and Finland, housing prices fell in the fourth quarter. The decline in Luxembourg was especially noticeable — by 8.3%, which was a record among EU countries. Analysts attribute this trend to a decrease in demand for premium real estate and a slowdown in economic growth.

Forecasts for 2025 — Slowdown, but not a halt

Most experts agree that in 2025, real estate prices in the EU will continue to grow, but at a more moderate pace. The main reasons are the gradual saturation of the market in some segments and the first signs of stabilization of demand. However, the situation will vary significantly from country to country. In countries with fast-growing economies, such as Hungary, Poland or the Czech Republic, analysts predict continued high rates of price growth due to the continued increase in demand and the influx of investment in the real estate sector. At the same time, in some Western European countries, such as France or Germany, a further slowdown in the market is possible due to a decrease in the purchasing power of the population and saturation of the premium segment. Overall, despite the expected slowdown, the EU real estate market in 2025 will remain active and attractive to investors. The key factors will be the economic situation in specific countries, the availability of mortgage loans and the balance of supply and demand in various market segments.

Based on the above, we can conclude that the European Union real estate market in 2024 demonstrated record growth in housing and rental prices, continuing a long-term trend. The average property price in the EU increased by 4.9% year-on-year, while rents increased by 3.2%. The key factors behind the growth in property prices were high demand, low mortgage interest rates and limited supply, especially in large cities. Experts predict that in 2025, housing and rental prices in the EU will continue to grow, but at a more moderate pace due to gradual market saturation. However, the situation will vary significantly from country to country depending on economic conditions and the balance of supply and demand. In the long term, the EU real estate market will remain attractive to investors, but its dynamics will largely depend on the general economic situation in the region and the world.