The European housing market continues to grow, with prices and rents rising amid a structural supply shortage.

According to the latest Eurostat report, the European Union's real estate market continues to demonstrate a steady upward trend. In the fourth quarter of 2025, average house prices across the EU increased by 5.5% year-on-year, while rents increased by 3.2%.

While growth rates vary across countries, the overall trend remains unchanged: the European housing market continues to rise in price, reflecting a structural imbalance between supply and demand.

Looking at a longer time horizon, it becomes clear that the current dynamics are not a short-term blip. Between 2015 and the end of 2025, house prices in the EU increased by almost 65%, while rents increased by more than 20%.

This confirms that the European real estate market is in a long-term growth cycle, driven not by speculative factors, but by fundamental structural changes.

While EU averages appear moderate, the gap between individual markets remains significant.
Several countries in Eastern and Southern Europe have recorded multiple price increases over the past decade—in some cases, more than two- to three-fold. Meanwhile, several northern markets are showing weaker growth or even a decline.
This highlights a key feature of the European market—its strong fragmentation, where local factors play a decisive role in shaping price dynamics.

Analysts identify several fundamental reasons for the sustained growth:
— Limited supply of new housing
— Rising construction costs
— Urbanization and the concentration of demand in large cities
— Increasing share of short-term and investment rentals
— Demographic pressure in key regions

These factors provide long-term structural support for prices, reducing the likelihood of large-scale corrections across the EU market.

The rental market, which is growing at a more stable pace, deserves special attention. Despite lower volatility compared to sales, rentals are showing steady growth in most EU countries. This enhances the investment appeal of residential real estate, especially in cities with high migration rates and limited building stock.

The current situation in the European real estate market does not reflect an overheating phase, but rather structural long-term growth. Despite local differences, the overall trend remains positive.

For investors, this means that the European market continues to be:
— sensitive to local factors
— resilient in the long term
— with limited supply and stable demand