Jul 19, 6:03 AM
Europe’s housing market recovered in 2025 — but the rebound was uneven
Lower borrowing costs brought buyers back in much of Europe, yet the map still shows sharp national differences, with Croatia once again refusing to play along.
Europe’s housing market did something rare in 2025: it moved again. After a period in which higher borrowing costs had made buyers cautious, transactions picked up across most of the continent once financing became less punishing. In 17 of 20 European countries, sales rose. Apparently, when money stops getting more expensive by the month, people rediscover the thrill of buying a home.
The strongest annual increase came from Slovenia, where home sales jumped by 29.9%. Lithuania followed with 22.8%, Austria with 21.4% and Belgium with 20.2%. Luxembourg, Hungary, the Netherlands, Denmark, France and Portugal also posted double-digit growth. Latvia, Finland and Norway were close behind, while Croatia went the other way with a 4.1% decline. Eurostat’s figures leave little room for comforting generalisations: Europe had a broad recovery, but not a uniform one.
That matters because real estate is no side show. The European Central Bank says it is the main source of household wealth in the eurozone. Most people buy a home to live in, though some still treat property as an investment, as if the market were a permanent substitute for productive work. Mikk Kalmet of Global Property Guide said residential transactions are mainly shaped by mortgage affordability, interest rates, household incomes, employment, consumer confidence and housing supply. In other words, the boring parts of the economy still decide the outcome.
France stood out for scale rather than speed. Among the 14 countries with available data, it recorded more than one million home sales in 2025, easily the highest total. The Netherlands followed with 265,000, while Hungary, Belgium, Portugal and Norway each came in between 130,000 and 160,000. Spain, the other large economy with data available, saw sales rise by 5.4%. France also showed remarkable price restraint, with house prices up just 0.1% between the first quarters of 2025 and 2026.
Croatia remained the awkward exception. Sales there fell for the fourth consecutive year, even as the country’s housing market became more expensive in every direction. House prices rose by 14.3% between the first quarters of 2025 and 2026, the fourth-highest increase in Europe, while rents surged by 39.1%, the fastest growth on the continent. Yet transactions still fell. Tourism may keep the brochures glossy, but it does not automatically create a healthy domestic market.
Kalmet said activity strengthened across much of the EU in 2025 as Euribor and other bank rates stabilised, giving would-be buyers more predictability from late 2024 onwards. He also pointed to high construction costs and limited building activity, which continued to restrict supply. That leaves Europe with a familiar imbalance: demand can return quickly when financing improves, but new homes do not appear just because policymakers would like a better headline. The rebound is real. The shortage, as usual, is still there.
Written by Sandy van Dongen sandy.vandongen@alpineweekly.com
