We’ve all dreamed of packing up and moving to the continent at one time or another, but if you’re serious about it, you might want to brace yourself. Across most of Europe, house prices are climbing fast.
Despite a rather challenging economic backdrop (including inflation jitters and changes in interest rates), on average EU home prices grew by 5.4% year-on-year between April and June 2025, according to recent figures from Eurostat.
Almost every member state saw an increase except for Finland, which took a bit of a breather with a 1.3% dip.
When you strip out inflation, 21 out of 26 countries still showed real growth, demonstrating a genuine rise in the value of bricks and mortar.
The countries where house prices are rising
Leading the property pack is Portugal, with a 17.2% jump in house prices. A mix of strong foreign demand (hello, Algarve), tight supply, and government perks like residency programmes have buyers lining up in this European destination.
Zooming out further to look at the picture between 2020 and 2025, Portugal’s housing market saw a huge 40.6% price jump. The pandemic shift to remote working, plus lifestyle-seekers pining for Lisbon’s charm or the Algarve’s sun-kissed beaches likely have something to do with this.
Mikk Kalmet, senior analyst at Global Property Guide, told Euronews: ‘Portugal’s surge in real house prices has been driven by strong foreign demand, particularly from digital nomads and expats relocating under tax incentives and residency programs, combined with a persistent housing supply shortage.’
But Portugal’s not the only European destination with rising house prices. Bulgaria (+15.5%), Hungary (+15.1%), Croatia (+13.2%), Spain (+12.8%), Slovakia (+11.3%), and Czechia (+10.5%) all crafted impressive double-digit price gains in the past year.
Meanwhile, Western Europe’s big hitters — France, Germany, Sweden, and Italy — experienced more modest rises between 0.5% and 3.9%, suggesting these markets are balancing demand and the ever-present concern of affordability.
And just outside the EU, Turkey saw an eye-popping 28.5% price hike in late 2024, riding a whirlwind growth wave that’s been going strong since 2019.
Accounting for inflation
Adjusting for inflation reveals a slightly altered landscape but still confirms strong growth in several markets. Portugal and Bulgaria lead real price increases with 14.3% and 14.1% respectively, while Hungary and Spain follow closely with real gains at 9.2%, and Croatia records an 8.9% increase.
Meanwhile, Finland’s housing market took a hit with a 2.6% real-term fall, and Sweden and Romania also faced slight declines.
France and Austria saw near-flat or minor dips, signalling that their already high prices might be bruising buyers’ wallets a bit too much.
So where does this leave us? Europe’s housing markets in 2025 look like a patchwork quilt. Demand driven by migration, fiscal perks, and lifestyle dreams keep prices buoyant in many places. But economic slowdowns, rising interest rates, and oversupply risks could trip up some markets.
Affordability remains a stubborn challenge, as prices are outpacing incomes in many spots, which might soon put the brakes on demand if things don’t improve.
And with supply still tight in popular urban and coastal zones, prices may well continue their climb in those hotspots too.
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