Rising House Prices in the EU
House prices in the European Union continued to rise in the second quarter of 2025, marking the seventh consecutive year-over-year increase. This trend highlights a complex housing market where affordability concerns are not yet causing price declines in many areas, despite challenges for many Europeans trying to enter the market.
Nominally, house prices increased in all EU countries except Finland. When adjusted for inflation, costs also rose in 21 out of 26 countries. The data reveals that while many people still face difficulties in purchasing homes, the overall trend remains upward in most regions.
Strongest Increases Over the Past Year
According to Eurostat, the average annual increase in house prices across the EU was 5.4% in the second quarter of 2025. Seven countries recorded increases of more than 10%, with Portugal (17.1%), Bulgaria (15.5%), and Hungary (15.1%) leading the way. Other countries such as Croatia (13.2%), Spain (12.8%), Slovakia (11.3%), and Czechia (10.5%) also saw double-digit growth.
In contrast, Finland was the only country to experience a decline, with house prices falling by 1.3% year-on-year in the second quarter of 2025. In three other countries, the increase was minimal, with France (0.5%), Sweden (0.7%), and Cyprus (1%) recording growth of 1% or less.
Among the EU’s major economies, Germany saw a 3.2% increase, while Italy experienced a 3.9% rise. Turkey has also seen a surge in house prices, though recent data is not yet available. According to the latest data from the fourth quarter of 2024, Turkish house prices rose by 28.5%, making it the top performer in the region.
Real Price Growth and Economic Factors
When adjusted for inflation, the average real increase in house prices across the EU was 2.8%. Portugal (14.3%) and Bulgaria (14.1%) recorded the strongest real price growth, both exceeding 14%. Hungary and Spain each saw increases of 9.2%, while Croatia had an 8.9% rise.
Portugal’s real price surge has been driven by strong foreign demand, particularly from digital nomads and expats relocating under tax incentives and residency programs. Limited new construction, especially in Lisbon and coastal regions, has intensified competition for existing properties, pushing prices above local income growth.
Bulgaria’s real price increases have been attributed to economic growth, easier access to mortgages, and optimism around Eurozone accession. However, in five countries, real house prices declined, with Finland experiencing the largest drop at 2.6%. Sweden and Romania followed with decreases of 1.7% and 1.2%, respectively.
Long-Term Trends and Regional Variations
Examining long-term price changes offers a clearer picture of how the residential real estate market is evolving. Between the second quarters of 2020 and 2025, real house prices in Portugal rose by 40.6%, the highest in the EU. All other countries saw increases of less than 30%.
The pandemic’s influence remains a key factor, as remote work has allowed employees and entrepreneurs to operate from anywhere. Portugal’s Non-Habitual Resident (NHR) tax regime has also contributed to its popularity. Traditional markets in cities like Porto, Lisbon, Cascais, Comporta, and the Algarve continue to attract lifestyle buyers and investors.
Croatia, Hungary, Lithuania, Bulgaria, Estonia, and Slovenia also recorded strong real growth, each exceeding 20%. Finland, however, experienced the largest decline over this period, with real house prices falling by 18%. Romania and Sweden followed with drops of 13.7% and 10%, respectively.
Among the EU’s four largest economies, only Spain saw an increase of 14%, while Germany, France, and Italy experienced declines. Spain, Croatia, and Greece benefit from international buyers, tourism-linked demand, and relative affordability compared to Northern and Western Europe. However, rising borrowing costs are gradually slowing price growth in some cities.
Over the past five years, Turkey has seen a dramatic surge in house prices. From late 2019 to late 2024, nominal prices increased by 1,175%, while inflation rose by about 500%, according to Eurostat.
