Where are house prices rising fastest in the EU – and why?

Thursday 10th October 2024 07:29 AM

This article was originally published in English

Latest Eurostat data shows a sharp rise in house prices in some Eastern European countries, as well as overall growth of 2.9% across the EU .

House prices continue to rise in the EU, particularly in Eastern European countries.

Since the second quarter of 2023, the five countries having recorded the largest increases are Poland (+17.7%), Bulgaria (+15.1%), Lithuania (+10.4%), Croatia (+10.0%) and Hungary (+9.8%).

Across the EU, house prices increased by an average of 2.9%. But some European countries are experiencing an opposite trend.

This is the case of Luxembourg where house prices have fallen by 8.3% since last year, Finland (-4.8%), France (-4.6%) and Germany with a drop of 2 .6%.

Like real estate prices, rents are also up 3% compared to the second quarter of last year throughout the EU.

But rental and purchase prices do not evolve in the same way on the continent.

While the cost of renting has seen slow and steady growth over the past fifteen years, the cost of buying has increased by more than 50% since 2014.

A case study in Poland

Poland, which has been one of the fastest growing countries in the European Union since joining the bloc in 2004, has seen many of these trends manifest in particularly striking ways.

“Housing prices in Poland have more than doubled since 2013”explains to Euronews Marcin Kręglewski, real estate specialist at the Dudkowiak Kopeć & Putyra law firm in Warsaw, specifying that salaries in the country’s business sector have also more than doubled during this period.

“Another factor is the still high demand for apartments or single-family houses. The demand for new housing is between 1 and 2 million units. In addition, in recent years Poland has experienced a significant influx of foreigners Currently, the number of illegal workers exceeds 1.1 million in the country..

Construction costs also saw a significant increase of 90% between 2016 and 2023according to the expert.

“This is largely due to increased labor costs and energy prices, availability of construction materials, and supply chain disruption following the COVID pandemic -19 and since the start of the war in Ukraine”explains Marcin Kręglewsk.

“Finally, we are seeing a decrease in land availability for housing projects, particularly in larger metropolitan areas”he concludes.

To find out more, watch the Euronews video in the player above.

Video editor • Mert Can Yilmaz