BRUSSELS — Europe’s housing market is recovering. Interest rates have stabilised, buyers who sat on their hands for two years are moving again, and in some countries sales volumes are surging. The problem is that builders cannot keep up — and that means prices keep climbing even as activity returns.
New data published by Eurostat and reported by Euronews shows a wide disparity in market performance across the EU in 2025.
The year-on-year change in sales volumes ranged from a 4.1% decline in Croatia to a 29.9% surge in Slovenia a swing of more than 34 percentage points between the weakest and strongest markets on the continent.
Mikk Kalmet, a real estate consultant at Global Property Guide, said the drivers are consistent across borders. “Residential real estate transactions depend mainly on the availability of mortgage loans, interest rates, household income, employment, consumer confidence, and the supply of housing,” he said.
Where Sales Are Surging
Double-digit growth in sales volumes was recorded across much of the EU in 2025. Lithuania led with 22.8%, followed by Austria at 21.4% and Belgium at 20.2%. Luxembourg recorded 18.6% growth, Hungary 17.3%, the Netherlands 13.9%, Denmark 12.7%, France 11.2% and Portugal 10.5%.
Slovenia’s 29.9% headline figure is the strongest in percentage terms but context matters. Annual sales in Slovenia totalled just 11,000 transactions. The growth rate is real, but the market is tiny.
France is the largest market in the dataset by volume. More than one million housing units were sold there in 2025 making it the only country in the 14-nation Eurostat dataset to break the million mark.
Kalmet noted that France had shifted from a decline in 2024 to growth in 2025, while Spain showed positive trends in both years. “Spain indicated relatively stable demand,” he said.
In Spain, home sales rose 5.4% in 2025 — a more moderate figure than its northern European peers, but significant given the country’s ongoing affordability crisis and the wave of protests that have swept Madrid and Barcelona over the past 18 months.
Where Sales Are Still Falling
Not every market recovered. Croatia recorded a 4.1% decline in sales volumes the only country where the market has been contracting for two consecutive years. Bulgaria fell 2.5% and Poland dropped 1.1%.
Kalmet was direct about Croatia’s situation. “Despite the Europe-wide recovery, housing market dynamics there continue to be driven by domestic factors,” he said pointing to a combination of wage pressures, tourism-driven property demand and structural issues in the mortgage market that have kept ordinary buyers on the sidelines.
Why the Recovery Is Happening Now
The timing of the bounce-back is not accidental. Euribor rates the benchmark that determines mortgage costs across most of the eurozone stabilised in late 2024 after two years of rapid increases that froze buyers out of the market.
Buyers who had delayed purchases during the period of high rates began returning to the market with greater certainty from late 2024 onward.
Kalmet described the pattern as pent-up demand releasing. “This points to a broad recovery in market activity, most likely reflecting improved financing conditions and the release of pent-up demand from the period of high interest rates,” he said.
The European Central Bank cut rates several times during 2024 and 2025 before pausing. That pause rather than further cuts is now the baseline assumption for most European buyers. Rates are not falling further. But they are no longer rising. That stability, more than the level of rates, appears to be what unlocked the recovery.
The Supply Problem Nobody Has Solved
The recovery in demand has exposed the structural weakness that runs underneath every European housing market supply.
High construction costs and weak building activity continue to constrain the number of homes coming to market across the continent.
Eurostat data shows EU house prices rose 60% between 2015 and 2024, while rents rose 25% over the same period. More buyers returning to the market without a corresponding increase in homes being built — will push prices higher, not lower.
Ireland sits at the sharp end of that dynamic. The CSO confirmed Irish house prices rose 6.8% nationally in the year to February 2026.
The country needs between 44,000 and 50,000 new homes every year. It built 36,000 in 2025. The European recovery is welcome news for confidence. It is not welcome news for anyone still trying to buy their first home.
M10News has been reporting on the EU’s first housing plan and what it means for affordability across Europe, on Spain’s housing crisis and the protests sweeping Madrid and on Irish house prices forecast to rise a further 5% over the next 12 months.
Source: Euronews / Eurostat | Editing by M10News Housing Desk | © 2026 M10News. All rights reserved. Unauthorised reproduction is prohibited.
