Housing Prices in Europe Are Rising: Where Real Estate Prices Increased the Most in 2026

The European housing market is picking up steam again. In some countries, apartments and houses are rising in price so quickly that it’s becoming increasingly difficult for buyers to keep up with the market, while in others, prices are remaining virtually unchanged or even falling. This disparity is particularly noticeable in 2026 and speaks volumes about the state of the economy, housing demand, and the affordability of real estate in various European countries.

In the previous article, we reported on the most expensive cities in the world to live in in 2026, according to Numbeo.

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How much did housing prices rise in Europe in 2026?

In the second quarter of 2026, housing prices in the European Union were, on average, 4.7% higher than a year earlier. In the eurozone countries, the increase was 4.0%. Compared to the first quarter of 2026, housing prices rose by another 1.2% in the EU and 1.1% in the eurozone.

The pace of growth slowed slightly. In the first quarter of 2026, the year-over-year increase was 5.1% in the EU and 4.6% in the eurozone. At the same time, the overall trend remains upward: the EU housing price index exceeded the 100 mark (base 2025=100) in the second quarter of 2026, whereas as recently as 2016 it stood at approximately 65.

Over the past year, prices rose in 23 EU countries for which Eurostat had available data. Declines were recorded in only three—Finland, Luxembourg, and France. The current price increase affects most European markets, although its magnitude varies significantly from country to country.

Trends in the EU Housing Price Index, Q2 2016 – Q2 2026. Source: Eurostat / Euronews.

In our previous article, we discussed where foreigners can buy real estate in 2026.

In which European countries have housing prices risen the most?

The most notable growth is concentrated in Southern, Central, and Eastern Europe. It is here that the market is driven by high demand, a shortage of supply, rising incomes, and investor activity. At the same time, the gap between countries is very wide: in the leading countries, prices rose by more than 10% over the year, while the EU average was significantly lower.

The highest annual price growth in the second quarter of 2026:

- Portugal – +16.5%

- Bulgaria – +15.5%

- Lithuania – +14.3%

- Slovakia – +13.6%

- Croatia – +12.7%

- Spain – +12.1%

- Romania – +12.1%

- Latvia – +11.4%

- Hungary – +10.2%

It is noteworthy that the highest growth rates are currently not characteristic of Europe’s largest economies, but rather of smaller and more dynamic markets. This points to strong local demand and limited housing supply in certain countries.

Among the major economies, Spain stands out in particular, with prices rising 12.1% over the past year. By comparison, Italy saw a 4% increase, Germany saw just 0.6%, and France’s market began to decline. This disparity shows that there is currently no single scenario for the entire European market.

Year-over-year change in housing prices in European countries in the second quarter of 2026 compared to the second quarter of 2025. Source: Eurostat / Euronews.

Why are housing prices rising the most in Portugal and Bulgaria?

Portugal and Bulgaria topped the European ranking in terms of price growth rates, but the reasons differ between these countries.

In Portugal, the main problem is a shortage of supply. Demand for housing consistently exceeds the supply of available properties, especially in Lisbon, Porto, and popular coastal areas. Additional pressure comes from the limited pace of new construction, foreign investment, and demand in tourist regions. As a result, even with high prices, there are still not enough properties on the market for buyers.

In Bulgaria, the growth is more closely tied to domestic demand. Household incomes and wages are rising, and mortgage financing remains relatively affordable. Real estate is also actively viewed as an investment asset, which further supports demand and drives prices upward.

Both markets clearly demonstrate that identical double-digit growth can have different origins. In Portugal, the housing shortage remains the key factor, while in Bulgaria, income growth, lending, and investment demand are playing a stronger role.

Learn more about the Top 5 Real Estate Markets for Investment in 2026 by following the link.

Where in Europe is housing getting cheaper or barely getting more expensive?

Amid double-digit growth across much of Europe, there are also countries where the market is moving in the opposite direction. In the second quarter of 2026, annual price declines were recorded in only three countries: Finland—by 2.7%, Luxembourg—by 2.2%, and France—by 0.8%.

In Finland, the market is under pressure from weak economic growth, low consumer confidence, and the effects of high interest rates. Buyers are more cautious about taking out loans, and demand is recovering more slowly than in countries with stronger labor markets and higher incomes.

In France, the situation is being held back by housing affordability issues, weaker demand, and the impact of high mortgage rates from previous years. Some potential buyers are postponing purchases due to economic uncertainty, which reduces pressure on prices.

Weak growth is also evident in Germany, where housing prices rose by only 0.6% over the past year. High mortgage rates are reducing housing affordability and lowering demand for new loans. By comparison, in Italy, prices rose by 4%, which is below the EU average.

In our previous article, we discussed where it’s most expensive to buy an apartment in Europe: a ranking of cities in 2026.

Why do housing prices vary so much from country to country?

The real estate market in Europe is developing unevenly, so the EU average does not reflect the situation in individual countries.

Several factors simultaneously influence price trends:

- The volume of new construction. If few new homes are being built but demand remains high, prices rise faster.

- Mortgage rates. Cheaper financing supports demand, while high rates limit buyers’ ability to purchase.

- Household income. Rising wages increase purchasing power and allow households to take out larger loans.

- Migration and demographics. Population inflows into major cities and economic centers increase demand for housing.

- Investment demand. In popular tourist and business regions, real estate is actively purchased not only for residential purposes but also as an investment asset.

- Land scarcity and regulatory restrictions. In cities where it is difficult or expensive to build new properties, supply grows more slowly.

This is precisely why two countries with roughly the same income levels can experience completely different price dynamics. Where demand is growing rapidly and new supply is scarce, the market overheats much faster.

At the same time, weak economic growth, expensive credit, and low buyer activity can hold prices back even in large and wealthy countries. Therefore, it is better to assess the European housing market not as a single entity, but separately for each country and city.

In our previous article, we discussed how to rent an apartment in Germany: the lease agreement, security deposit, and tenant rights.

What will happen to housing prices in Europe next?

In the coming months, the European housing market is likely to remain uneven. In countries with a supply shortage and steady demand, prices may continue to rise, even if overall economic activity slows down.

Gradually lower borrowing costs could provide additional support to the market. Lower mortgage rates expand the pool of potential buyers and bring back to the market those who had previously postponed a purchase due to high borrowing costs.

At the same time, rapid growth across all of Europe is not to be expected. In some markets, prices will continue to be held back by weak incomes, economic uncertainty, excess supply, or low demand.

Therefore, before buying real estate or moving, it is important to look beyond just the average price per square meter. Factors such as the rate of growth in housing prices, mortgage terms, income levels, the volume of new construction, and the specific situation in a particular city or region are all significant.

Buying a home in another country is not only an investment but also a serious legal procedure. Mistakes in documents, unaccounted taxes or restrictions for foreigners can lead to financial losses. Consultation with a real estate lawyer from Visit World will help you to safely complete the transaction, check the seller and avoid hidden risks. Contact the experts to make your real estate purchase abroad as transparent and secure as possible.

We remind you! The Cypriot parliament is considering draft laws that could significantly change the conditions for buying real estate for citizens of countries outside the European Union. The initiatives include quantitative limits on properties, geographical bans and transparency requirements for transactions. Read more about the proposed restrictions, foreign purchases statistics and how to prepare for possible changes in the Cyprus real estate market.

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