Houses prices across Europe have skyrocketed in the last 10 years, with many countries seeing their housing prices more than double. Of them, Estonia has signed up the largest increase in housing prices between 2015 and March 2025. Hungary and Iceland, though small, are significant. These skyrocketing property values and rental costs have been felt in both countries.
Overall, the data shows an incredible boom in Hungary’s real estate sector. The costs for non-transitory REUSD have skyrocketed to over three times their 2015 prices. This trend has created an unbelievable burden on residents, effectively cutting the dream of homeownership out for many. In Iceland, the surge in the housing market has been even more dramatic. Prices are currently close to 2.5 times higher than 10 years ago.
As of early 2025, average purchase prices in Reykjavík and its surrounding municipalities reached about €558,000. This dramatic increase is part of a larger movement of rising property prices across many urban centers. This blog post will explore the principal areas, focusing on the costs of housing, which have accelerated beyond comprehension. We’ll hone in on the reasons propelling these increases.
Significant Increases in Rental Prices
Renters across Europe have been affected, facing stark increases in the cost of housing. Similarly, in Hungary rental costs increased by over two and a half times since 2010, with a shocking jump of 114%. This increase has posed severe difficulties for anyone looking for lower priced housing options in large metropolitan areas.
Estonia’s rental market is a reflection of this trend, with prices more than tripling since 2010, an increase of 212%. This is one of the most extreme in the world. These updates have raised alarm over rising housing costs and a lack of affordability for the residents that the community intends to serve.
Like Latvia, Lithuania, too, has seen rising rental prices, which have increased by 175% within ten years. Iceland is a distant second, up 120% in rental rates. These distressing developments demonstrate the increasing challenges that tenants face when searching for affordable housing alternatives in many European countries.
The Economic Impact of Housing Investments
In 2023, Cyprus recorded an exceptional increase in its nation-leading property market investments. This new infusion accounted for a staggering 8.6% of the nation’s entire GDP. This major financial engagement highlights the role of real estate continues to be a leading economic driver in the Cypriot economy.
Greece registered a significantly lower net investment rate in housing of only 2.2% of its GDP. This stark contrast is a prime example of the different approaches to property ownership and economic development throughout Europe.
Countries such as Poland and the Czech Republic have seen similar high levels of housing costs rising sharply. Property prices in Poland increased to nearly 180% of their value in 2015. In a similar way, the Czech Republic saw huge increases, with housing prices climbing to almost 180% at one point in those years. These trends are indicative of larger economic changes that are eroding purchasing power and quality of life across the entire region.
Regional Comparisons and Trends
Even as countries have experienced dramatic increases (and in many cases, decreases) in housing prices, other countries have enjoyed a marked stability. Very little has changed in Finland’s property market since almost a decade ago, a sign of a calmer economic climate. Italy’s house prices have increased by just 7% in the last nine years. That’s a sign that local governments are taking a more measured approach to new real estate development.
In Hungary, the average price for an apartment in Budapest starts at €250,000 and goes up to €1.5 million. This broad range underscores the inequities of urban housing markets, where the neighborhood and type of housing can have a powerful impact on cost.
The different rates of increase of housing costs across Europe highlight the varied economic conditions and dynamics of housing demand at play in each region. Policymakers and residents alike will have to wrestle with these shifts as they look to address the persistent housing affordability crisis.
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