Behind Europe’s headline-grabbing housing stories lies a more complex reality. The RE/MAX Europe Mid-Year Market Report 2025 dives deep into the real numbers shaping the Europe housing market 2025. Combining data from key countries with insights from local experts, this analysis explains what’s truly driving today’s price and rent trends—and what they mean for buyers, renters, and investors across Europe. Read on to uncover the surprising stories behind the data and why the headlines only tell half the truth.
The Price Paradox: When Lower Rates Don’t Mean Lower Prices
As central banks eased borrowing costs, home prices across the euro area climbed 5.4% year-on-year. The reasons aren’t hard to spot: demand picked up faster than supply, supported by improved buyer confidence and more accessible financing. With too few homes on the market, cheaper borrowing costs quickly translated into higher prices. In Portugal, foreign buyers kept demand strong, pushing house prices up 5% per quarter. The Czech Republic saw similar momentum as renewed confidence returned to the market. Only Turkey broke the trend, as political turbulence sent square metre prices down 10% between Q1 and Q2.
Q1 v Q2 2025 Sales Price Development Across Europe
N:B Slovenia and Austria data is sold prices and therefore not comparable with asking prices of other markets.
Turkish prices have been converted to euros.
Source: Casafari, Turkish Statistical Institute, RE/MAX Türkiye, Valuo
The Salary Story: When Similar Numbers Hide Different Realities
Price growth only tells part of the story. Affordability looks different once salaries are taken into account, and surface similarities between markets can be deceiving. In Turkey, homes cost 23 times the average annual salary, pushing many into multigenerational living. By contrast, homes in Germany and Austria cost around six times the average salary. While affordability appears similar, their homeownership rates tell a different story: compared directly with Germany, Austria’s rate is slightly higher, reflecting stronger buyer incentives and fewer long-term renters. Yet, compared with other European countries, Austria’s overall homeownership rate remains relatively low.
It’s a reminder that affordability isn’t just about the numbers—it’s about market structure. And as financial conditions shift, so does buyer behavior.
Source: Casafari, Turkish Statistical Institute, RE/MAX Türkiye, Valuo
Velocity Matters: Why Properties Are Selling Faster
Affordability may be stretched, but demand hasn’t disappeared—it’s accelerating. Across most of Europe, homes sold faster in Q2 as buyers rushed to act before prices climbed further. Portugal saw the biggest drop in time on market, while German apartments rebounded after a slow start to the year.
Faster transactions signal renewed market confidence, but they also tighten supply even more—feeding into the next piece of the puzzle: rents that rise even when governments try to keep them down.
Source: Casafari, Turkish Statistical Institute, RE/MAX Türkiye, Valuo
Source: Casafari, Turkish Statistical Institute, RE/MAX Türkiye, Valuo
Rules vs. Reality: Why Rents Keep Rising Anyway
As ownership becomes harder to reach, pressure is shifting to the rental market—and policy responses aren’t solving the problem. In Spain, new rent caps were meant to cool inflation, yet rents still rose 5% between quarters, as the policy targeted prices but not scarcity. Italy shows how these imbalances ripple outward: as city apartments grew less affordable, renters looked farther out for space, pushing up suburban rents instead. In the Czech Republic, average rental prices held steady overall, though competition for smaller city flats remains intense.
Q1 v Q2 2025 Rental Price Development Across Europe per sqm (€)
Source: Casafari, Turkish Statistical Institute, RE/MAX Türkiye, Valuo
Calculating the Cost: What Rent Means for Real Lives
The numbers behind rent costs reveal the human side of Europe’s housing crunch. In Turkey, renters spend an impossible 126% of average income on rent, surviving only through multiple earners or family help. In Portugal and Spain, rent accounts for around 60% of income, pushing many toward ownership simply because renting costs too much. Germany stands apart—strong wage growth and tenant protections keep average rent closer to 25% of income, creating a model of long-term stability.
The contrast shows that affordability isn’t only about prices—it’s about systems that either protect or expose tenants. And nowhere is that divide more visible than in Europe’s cities, where national trends give way to local realities.
Source: Casafari, Turkish Statistical Institute, RE/MAX Türkiye, Valuo, ImmoUnited
City Dynamics: Why National Averages Miss the Point
Zooming in on the cities behind the numbers shows why Europe’s housing market can’t be read from national data alone. In Germany, apartment purchase prices range widely—Munich leads at €8,650/m², about 50% higher than Berlin and Hamburg—yet all three cities saw slight purchase price declines while rents surged, up 16% in Berlin and 18% in Hamburg. Italy shows a similar contrast: Rome’s house prices jumped 28%, while Milan’s apartment market rose 15%, driven by different buyer segments. In Prague, strong demand from students and young professionals pushed apartment prices up 17%.
These contrasts make one thing clear: local dynamics—jobs, demographics, liveability—shape housing outcomes far more than national averages. And at the root of all these city stories lies one shared problem: not enough homes being built.
Supply Bottlenecks: The Construction Story Behind the Price Story
Across Europe, construction continues to trail far behind demand. Spain increased new housing projects by 15%, yet its biggest cities still fall short by tens of thousands of units each year due to slow permits and rising costs. Germany’s building sector has contracted for four straight years, and in Turkey, post-earthquake reconstruction remains far behind schedule.
Governments are now trying to fill the gap: Spain’s €1.3 billion modular housing plan, Portugal’s “Construir Portugal” program, and Slovenia’s public rental initiative all aim to rebuild faster and smarter. But with structural shortages this deep, it’s clear that housing pressures won’t ease overnight.
Get the Complete Picture
Europe’s housing market is shaped by more than prices—it’s driven by supply shortages, policy shifts, and changing city demographics that influence how and where people live. The RE/MAX Europe Mid-Year Market Analysis 2025 unpacks these forces with regional data, expert insights, and forward-looking analysis for the months ahead. Download the full report to see how these trends are unfolding in your country or city—and for a local perspective on what they mean for you, connect with your nearest RE/MAX agent, who can turn these insights into real-world opportunities.
