Europe's Housing Hotspots: Decoding a Decade of Price Surges

Over the past decade, the cost of putting a roof over one's head across the European Union has undergone a dramatic transformation. Between 2015 and 2024, house prices soared by a staggering 53% on average, with some nations witnessing increases that have fundamentally reshaped their property markets. This surge, fuelled by factors such as escalating building costs, rising mortgage rates, constrained supply, and the growing allure of property as an investment, has created eye-watering price levels in several EU countries.

Topping the list of dramatic price inflation is Hungary, where the cost of dwellings has nearly tripled since 2015. In the nation's vibrant capital, Budapest, securing an apartment now typically requires an investment ranging from €250,000 to a remarkable €1.5 million. Following closely is Iceland, although not an EU member, where property prices have increased approximately 2.5 times compared to 2015. The capital region, encompassing Reykjavík and its surrounding municipalities, commands the highest prices, averaging around €558,000. While the Bank of Iceland notes a softening in demand and an increase in supply leading to a slower pace of price growth, year-on-year house price inflation still stood at a significant 8% in March.

Beyond these frontrunners, several other European nations have experienced substantial increases in property values over the last nine years. Lithuania, Portugal, the Czech Republic, Bulgaria, Estonia, and Poland have all seen house prices more than double during this period, highlighting a widespread trend of increasing housing costs across the continent.

In contrast, Finland stands out as an outlier, where property prices have remained relatively stable compared to almost a decade ago. However, this overall stability masks significant regional disparities, with a stark contrast in dwelling costs between rural areas and the capital city, Helsinki. Recent analysis from Global Property Guide suggests that the downturn in the Finnish property market, which began in 2021, has likely reached its lowest point. An anticipated economic recovery is expected to support a gradual increase in house prices, particularly for newly built properties, while second-hand dwelling prices are predicted to rise only marginally this year. Currently, the average price for a second-hand flat is around €4,612 per square metre, translating to approximately €345,900 for a 75 sqm apartment, though similar properties in Helsinki could command prices in the €400,000 to €500,000 range. Notably, Eurostat lacks comprehensive data for Greek house prices, but figures from the Bank of Greece indicate that urban property prices are just slightly above their 2008 levels.

Venturing outside the EU, Turkey presents an even more extreme case, with house prices having multiplied an astonishing 17 times since 2015. In Istanbul, a two-bedroom apartment now typically costs around €120,000. While this might appear relatively affordable compared to Western European prices, it's crucial to consider the context of a nearly 38% year-on-year increase in consumer prices and average gross monthly salaries just exceeding €600.

The Rising Cost of Renting: A Less Dramatic but Still Significant Increase

While house prices have seen dramatic surges, the cost of renting has also become considerably more expensive across Europe, albeit at a more moderate pace. According to the latest available data from Eurostat, rents in the EU increased by 26.7% between 2010 and the fourth quarter of 2024.

However, several countries have experienced rental price increases far exceeding this average. Estonia again leads the way, with rental prices more than tripling (+212%) compared to their 2010 levels. Lithuania has seen a 175% increase, and in Iceland, rental costs have grown by 120%. In Hungary, rental prices have more than doubled (+114%) since 2010. Bucking this trend is Greece, where rental prices are 13% cheaper compared to the same period. Meanwhile, in Turkey, rental prices have skyrocketed, nearly 8.8 times higher than they were a decade ago, according to the latest OECD data.

Housing Costs: Identifying the Most Expensive Regions in the EU

The overall cost of housing, which includes utilities in addition to rent or mortgage payments, has also risen substantially in many EU member states. Between 2015 and March 2025, residents of Estonia experienced the most significant increase in housing costs within the bloc, paying slightly more than double what they did ten years prior. Poland and the Czech Republic followed closely, with housing costs around 180% of their 2015 levels. Across the EU, on average, these costs increased by more than 40% over the same period. Spain saw the smallest rise within the bloc, just above 20%, while Albania, an EU accession candidate, recorded an even smaller increase.

When comparing housing costs to the EU average, Ireland emerges as the most expensive country, based on the latest Eurostat data from 2023. France and Germany recorded slightly higher costs than the EU average, while Italy and Spain were a bit less expensive. In contrast, residents of Malta and Hungary paid only around two-thirds of the EU average, with Bulgarians facing the lowest housing costs, slightly less than 40% of the EU average.

These high rental and house prices are contributing to a significant social issue: many young Europeans are unable to leave their parental homes for years after entering the workforce. According to Eurostat, the average age at which young Europeans leave their parents' home is 26.3 years, with considerable variation across EU countries, ranging from 21.4 years in Finland to 31.8 years in Croatia.

Where is Investment in Property Concentrated?

In 2023, Cyprus recorded the highest proportion of its GDP invested in property, at 8.6%, according to Eurostat. Italy followed with 7%, slightly more than Germany (6.9%) and France (6.4%). The lowest rates of property investment were observed in Poland (2.2% of GDP) and Greece (2.3%). The average investment in housing across the EU in 2023 stood at 5.8% of GDP, representing approximately one trillion euros.

The data clearly illustrates the significant shifts in European housing markets over the past decade. While some regions have experienced explosive price growth, others have remained relatively stable. The increasing cost of both buying and renting has profound implications for affordability and the living situations of many Europeans, particularly younger generations. Understanding these trends is crucial for policymakers and individuals alike as they navigate the evolving landscape of European housing.

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