Prime Highlights:

Portugal and Hungary lead EU house price growth charts, with Portuguese house prices up 120% since 2010.

Strongest growth fueled by shortage of supply, rising cost of building, and demand from abroad.

Key Facts:

EU overall increase in house prices since 2010: 55.4%; Portugal fell just an inch short.

Hungary recorded record 173% price hike between 2015 and 2023 — busiest in Europe.

Key Background :

The European property sector has experienced the overall paradigm shift over the past decade with house prices increasing in the majority of nations. The most significant increase is experienced by Portugal whose house prices have appreciated by 120% since 2010. The increase is light years beyond the EU average of 55.4% increase. Few of the main causes of the boom are foreign purchases by the buyers, and even shortfalls in availability of homes and pro-government policies towards foreign buyers.

Hungary had the highest price appreciation, with house prices increasing 173% over the period between 2015 and 2023. This was caused by a robust domestic economy, increased domestic income, and increased demand in the city and suburb residential market. Foreign and domestic investment also increased prices, particularly in Budapest capital and other inner urban cities.

By comparison, the remainder of the EU has seen marginal rises or decreasing house prices. The Finnish economy has been extremely stable with an extremely modest growth of 5.4% over a period of eight years, and Italian house prices are 4% down over the eight years. All trends can be explained through differential population growth, economic performance, and housing market policy.

The growing affordability gap increasingly is facing the entire continent in a big way. Young adults and first-home buyers are being forced out of home buying in fast-growing cities, and governments are resorting to regulatory as well as budget policy to rein in red-hot markets. As the price of materials to construct continues to climb as well as labor, acting now against the housing crisis is on the policy agenda.

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