According to the REMAX Europe Mid-Year Market Analysis Report, property prices climbed 5.7 per cent across the EU in Q1 alone, fueled by improving economic sentiment and interest rate cuts of around two percentage points since mid-2024.
The report reveals significant price increases in several countries, with Portugal posting some of the strongest quarterly gains.
Portuguese apartments rose 5 per cent in Q1 and 6 per cent in Q2, supported by intense foreign buyer demand.
RE/MAX Europe CEO Michael Polzler said the shift has brought renewed urgency back to the market.
“Against this backdrop, it has never been more important to stay informed,” Mr Polzler said.
“Investor dynamics are shifting, buyers are refocusing on smaller apartments as an accessible entry point, and knowledge is becoming the ultimate advantage.”
The report highlights major disparities in affordability across Europe.
In Türkiye, the average home now costs 23 times the average salary, while in Germany and Austria, the ratio is closer to six times income.
Portugal and the Czech Republic fall in the middle, with prices at 12 times average earnings.
RE/MAX Turkey Regional Owner Murat Goldstayn said that financing hurdles were shaping buyer behavior in his market.
“Demand is strongest for smaller, affordable homes, while luxury sales are subdued,” Mr Goldstayn said.
“Falling interest rates and strong rental yields may drive prices up again — but uncertainty will limit the pace.”
The rental market is experiencing significant pressure, particularly in Southern Europe.
Spain recorded one of the steepest rental increases, with rents rising 5 per cent between Q1 and Q2, despite new regulatory caps.
RE/MAX Spain Regional Director Jaime Suarez described a market approaching breaking point.
“Prices in Madrid and Barcelona are at record highs,” Mr Suarez said.
“Supply is constrained by regulation and by landlords moving to tourist lets. Build-to-Rent will help, but for now the imbalance defines the market.”
At the city level, Munich remains Europe’s most expensive apartment market at €8,650 per square meter, though prices softened slightly year-on-year.
Berlin and Hamburg posted strong rental gains of 16 per cent and 18 per cent, while Prague saw apartment prices surge 17 per cent year-on-year.
Construction shortages are deepening the supply gap across Europe.
Spain needs 150,000–180,000 new homes annually but continues to fall short.
Austria saw a 6 per cent decline in completed projects, while Türkiye issued 21 per cent fewer building permits in Q1.
RE/MAX Germany CEO Samina Julevic pointed to rising costs as a key factor in construction delays.
“Rising costs and labour shortages are forcing many projects to be delayed or cancelled,” Ms Julevic said.
“Until approvals speed up and pipelines stabilise, affordability will remain under pressure.”
Governments across Europe are implementing various measures to address housing challenges.
The EU has launched work on its first European Affordable Housing Plan, while Portugal unveiled a 59,000-home public housing program.
Germany extended rent controls to 2029 and launched its “Bauturbo” reform package.
First-home buyers face a mixed picture, with some countries offering support programs while others maintain strict lending rules.
Spain’s 20–25 per cent government mortgage guarantee, Italy’s 19 per cent interest deduction, and Germany’s KfW 124 low-interest loans all supported activity in the first half of the year.
RE/MAX Italy Regional Owner Dario Castiglia noted shifting buyer expectations.
“The main challenge remains finding quality, affordable homes in major cities,” Mr Castiglia said.
“Buyers are placing greater importance on energy efficiency and access to services, it’s reshaping demand.”
