Europe’s housing market staged a broad recovery in 2025, with home sales increasing in 17 out of 20 countries as lower borrowing costs encouraged buyers to return to the market despite continued rises in property prices.
New data from Eurostat showed that housing activity strengthened across much of the continent after a period of weaker demand linked to higher interest rates. Belgium and Austria were among the strongest performers, recording annual sales growth of more than 20%, while Slovenia posted the largest percentage increase at 29.9%.
According to the European Central Bank, residential property remains the largest source of household wealth in the eurozone, making housing activity a key indicator of economic confidence.
Mikk Kalmet, a real estate adviser at Global Property Guide, said residential property transactions are influenced by several factors, including mortgage affordability, interest rates, household incomes, employment levels, consumer confidence and the availability of housing.
The data revealed considerable differences between national markets. Croatia recorded the weakest performance, with home sales falling 4.1% during the year. Bulgaria and Poland also reported modest declines of 2.5% and 1.1%, respectively.
Among countries posting gains, Luxembourg recorded an 18.6% increase in transactions, followed by Hungary at 17.3%, the Netherlands at 13.9%, Denmark at 12.7%, France at 11.2% and Portugal at 10.5%. Latvia, Finland and Norway also registered strong growth, with annual increases close to 10%.
Of Europe’s largest economies, comparable data was available for France and Spain. Home sales in Spain increased by 5.4%, while France recorded one of the strongest recoveries after experiencing a decline the previous year.
Kalmet said the improvement reflected better financing conditions and the release of demand that had been postponed during the period of elevated interest rates.
France also recorded the highest number of transactions among countries with available data, with more than one million homes changing hands in 2025. House prices in France remained relatively stable, rising only 0.1% between the first quarters of 2025 and 2026.
The Netherlands recorded about 265,000 home sales, while Hungary, Belgium, Portugal and Norway each reported between 130,000 and 160,000 transactions. Slovenia registered the strongest percentage growth but remained the smallest market, with around 11,000 sales.
Croatia stood out as an exception to the wider European recovery. Despite property prices increasing by 14.3% and rents surging 39.1% over the year, the country recorded its fourth consecutive annual decline in home sales. Kalmet said domestic factors continued to weigh on Croatia’s housing market even as demand improved elsewhere across Europe.
He added that stabilising Euribor and other lending rates had restored confidence among buyers from late 2024 onward. At the same time, high construction costs and limited new housing supply continue to constrain the market, suggesting that affordability and inventory challenges remain significant issues across much of Europe.
