Europe’s housing market regained momentum in 2025, even as property prices continued to climb across most of the continent. Belgium and Austria were among the countries recording annual sales growth of more than 20%.

Real estate is the main source of household wealth in the eurozone, according to the European Central Bank. While most buyers purchase a home to live in, others see property as an investment.

Eurostat data shows wide differences in market performance, with annual changes in sales ranging from a 4.1% decline in Croatia to a 29.9% increase in Slovenia.

“Residential property transactions are mainly influenced by mortgage affordability, interest rates, household incomes, employment, consumer confidence, and housing supply,” Mikk Kalmet, real estate advisor at Global Property Guide, told Euronews Business.

Lithuania (22.8%), Austria (21.4%) and Belgium (20.2%) recorded growth of more than 20%.

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The annual increase was also in double digits in Luxembourg (18.6%), Hungary (17.3%), the Netherlands (13.9%), Denmark (12.7%), France (11.2%) and Portugal (10.5%).

Latvia (9.2%), Finland (9%) and Norway (8.3%) saw increases close to 10%.

Among Europe’s largest economies, data was available only for Spain and France. Home sales in Spain rose by 5.4%.

“France recorded one of the most notable turnarounds, moving from a decline in 2024 to growth in 2025, while Spain maintained positive growth in both years, indicating relatively resilient demand,” Kalmet said.

Croatia: Rents soar, but home sales keep falling

Croatia was not the only country where sales fell. Bulgaria and Poland also recorded slight declines, of 2.5% and 1.1% respectively.

In 2024, home sales declined in six countries, compared with three in 2025.

Kalmet noted that housing market activity strengthened across much of the EU in 2025.

“This points to a broad recovery in market activity, likely reflecting improved financing conditions and the release of demand postponed during the period of higher interest rates,” he said.

Croatia is a popular tourist and holiday destination where house prices and rents are rising rapidly. House prices rose by 14.3% between the first quarters of 2025 and 2026, the fourth-highest increase in Europe. Croatia recorded the strongest rent growth, at 39.1% over the same period.

However, the number of home sales in the country declined for the fourth consecutive year.

“Croatia was the only country to record declines in both years, highlighting that domestic factors continued to shape housing market performance despite the broader European recovery,” Kalmet said.

More than a million homes sold in France

Among the 14 countries with available data, France ranked first, with more than one million homes sold in 2025.

Meanwhile, French house prices rose by just 0.1% between the first quarters of 2025 and 2026.

In the Netherlands, 265,000 homes changed hands.

Hungary, Belgium, Portugal and Norway each recorded between 130,000 and 160,000 home sales.

Slovenia had the highest annual growth in percentage terms but the lowest number of sales at 11,000.

Kalmet noted that several smaller markets, including Slovenia, Lithuania, Belgium and Hungary, recorded particularly strong increases, although percentage changes can appear larger in smaller markets.

High construction costs and limited new supply

He also emphasised that the market began to recover as Euribor and other bank interest rates stabilised. People who had hesitated to buy during a period of uncertainty gained greater predictability from late 2024 onwards.

Kalmet also said high construction costs and limited building activity continued to restrict the supply of homes.