The European housing market demonstrated a robust recovery in 2025, with property prices climbing across the continent. Belgium and Austria emerged as standout performers, recording annual sales growth exceeding 20%. This surge in sales growth is a testament to the region's economic resilience and the continued appeal of real estate as a wealth-building asset. However, beneath the surface, a more nuanced picture emerges, with varying market dynamics across Europe.
One of the key drivers of this market recovery is the stabilization of interest rates. As Euribor and other bank interest rates stabilized, potential buyers gained greater predictability, encouraging them to enter the market. This shift in sentiment is particularly evident in smaller markets like Slovenia, Lithuania, Belgium, and Hungary, where strong increases in sales were recorded despite the overall market size.
However, the story is not uniform across the continent. Croatia stands out as an exception, with soaring rents and a 14.3% rise in house prices between the first quarters of 2025 and 2026. Yet, home sales in the country have been declining for the fourth consecutive year, highlighting the influence of domestic factors on the housing market. This dichotomy underscores the complex interplay between local conditions and broader economic trends.
In France, the market demonstrated remarkable resilience, with over one million homes sold in 2025, ranking it as the top performer among the 14 countries with available data. Despite this impressive sales volume, French house prices rose by a modest 0.1% between the first quarters of 2025 and 2026, indicating a more balanced market dynamic.
The Netherlands, Hungary, Belgium, Portugal, and Norway each recorded between 130,000 and 160,000 home sales, contributing to the overall market activity. However, it's worth noting that percentage changes can be more pronounced in smaller markets, as observed in Slovenia, where the highest annual growth percentage was recorded.
High construction costs and limited new supply continue to pose challenges to the housing market. These factors restrict the availability of homes, potentially contributing to the varying market performance across Europe. As the market continues to evolve, addressing these supply-side constraints will be crucial in sustaining the recovery and ensuring a more balanced housing market across the continent.
