An IMGlobalWealth.com News Report
Europe’s housing markets regained momentum in 2025, but the recovery was far from uniform. As borrowing costs stabilised after the sharp tightening cycle of 2023–2024, demand returned, lifting prices across much of the continent, albeit at markedly different speeds.
House prices across the EU rose by 5.5% year-on-year in the fourth quarter of 2025, signalling a clear rebound. Yet this headline figure masks a widening divergence between Europe’s faster-growing periphery and its more constrained core.
Central and Eastern Europe led the surge. Hungary recorded the strongest annual increase, with prices rising by 21.2%, supported by state-backed housing schemes and sustained investor demand. Elsewhere, the pattern was similar. Portugal saw prices climb by 18.9%, followed by Croatia (16.1%) and Spain (12.9%). These markets continue to benefit from strong international demand, particularly in coastal and lifestyle destinations where property increasingly serves as both a home and a globally traded asset.
“Since 2015, EU house prices have risen by nearly 65%, far outpacing incomes in many countries and exacerbating affordability concerns across both advanced and emerging markets”
In markets such as Greece, Cyprus and Malta, prices continued to rise at moderate to strong rates, supported by foreign demand and structural supply constraints.
By contrast, Europe’s largest economies remained subdued. Germany posted growth of around 3%, Italy 4.1%, while France lagged at roughly 1%. In these markets, affordability constraints, tighter lending standards, and the after-effects of earlier corrections continue to weigh on demand.
A broader Western comparison reinforces this pattern. In the United Kingdom, house price growth remained modest, constrained by elevated mortgage costs despite resilient demand in prime segments. Switzerland saw steady but moderate increases, underpinned by limited supply and strong household balance sheets, while Norway experienced a stabilisation following earlier declines as interest rates plateaued.
Looking beyond the short term, the longer trajectory remains striking. Since 2015, EU house prices have risen by nearly 65%, far outpacing incomes in many countries and exacerbating affordability concerns across both advanced and emerging markets.
EU House Price Growth Rates (2025)
- Hungary — +21.2%
- Portugal — +18.9%
- Croatia — +16.1%
- Spain — +12.9%
- Bulgaria — +10.8%
- Poland — +10.4%
Mid-Range Growth
- Netherlands — +5% to +6%
- Belgium — +4% to +5%
- Italy — +4.1%
- Germany — ~+3%
Low / Minimal Growth
- France — ~+1%
- Finland — ~0% to +1%
EU Average
- European Union (overall) — +5.5% (Q4 2025 YoY)
The result is a two-speed Europe, and, increasingly, a two-speed West. Dynamic, internationally exposed markets in the south and east continue to outperform, fuelled by global capital and lifestyle-driven demand. Meanwhile, the continent’s economic core, along with comparable Western economies, is recovering more cautiously, constrained by domestic fundamentals.
If 2025 marked a return of demand, it also underscored a deeper shift: housing in advanced economies is no longer merely local. It is shaped by global wealth flows, mobility, and investment behaviour, forces that policymakers are finding increasingly difficult to contain.
