Despite declines in key countries, overall housing prices in the EU rise in the first quarter of 2024, led by significant growth in Poland, Bulgaria, and Lithuania.
In the first quarter of 2024, housing prices in the eurozone saw a slight decrease of 0.4%, while the European Union as a whole experienced a 1.3% increase compared to the same period in 2023. This data, provided by Eurostat, highlights a mixed picture for the European housing market, with some countries seeing sharp declines and others showing robust growth.
For context, in the previous quarter (Q4 2023), housing prices had dropped by 1.2% in the eurozone and only rose slightly by 0.2% in the EU. When comparing Q1 2024 with Q4 2023, housing prices fell by 0.1% in the eurozone, while the EU saw a moderate rise of 0.4%.
Trends Across EU Member States
When examining the year-on-year changes across the EU, seven member states experienced a decline in housing prices during the first quarter of 2024, while nineteen countries recorded an increase. The sharpest decreases were observed in Luxembourg (-10.9%), Germany (-5.7%), and France (-4.8%). These declines reflect broader economic challenges in some of the EU’s largest economies, particularly as inflation and interest rate hikes continue to impact the housing market.
On the other hand, the strongest annual increases were seen in Poland (+18.0%), Bulgaria (+16.0%), and Lithuania (+9.9%), with these countries showing resilient demand for housing despite overall market uncertainties. This growth may be driven by a combination of factors, including economic recovery, rising wages, and government incentives for property buyers.
Quarterly Variations Across the EU
When looking at quarter-on-quarter data, the trend was slightly different. Eight EU member states reported a decline in housing prices, while prices rose in eighteen countries. The most significant quarterly declines occurred in Denmark (-2.5%), France (-2.1%), and Slovakia (-1.7%), reflecting ongoing corrections in these markets.
Conversely, Bulgaria (+7.1%), Hungary (+5.1%), and Poland (+4.3%) registered the largest quarterly gains, continuing their strong annual growth trends. These increases suggest that demand in these countries is still very high, possibly due to factors such as strong job markets, foreign investment, and favorable mortgage conditions.
Country-Specific Developments
- Germany: The German housing market experienced a significant decline, with prices dropping 5.7% year-on-year. This continued a downward trend from 2023, where prices had already fallen by 10.2%. Rising mortgage rates and an oversupply of housing may be contributing factors to this decline.
- France: Housing prices in France also saw a sharp drop, declining by 4.8% year-on-year and 2.1% compared to the previous quarter. This may be indicative of economic uncertainty and a cooling property market after years of steady growth.
- Poland: In stark contrast to Germany and France, Poland’s housing market boomed with an 18.0% year-on-year increase and a 4.3% rise compared to the last quarter. Strong demand and economic stability have driven this growth, making Poland one of the leading housing markets in the EU.
- Luxembourg: The country recorded the steepest year-on-year decline in housing prices, plummeting by 10.9%. This sharp decline follows a 14.5% drop in 2023, indicating a sustained cooling of the market after years of rapid growth.
Outlook for the European Housing Market
Overall, the first quarter of 2024 presents a complex picture for the EU housing market, with significant variations between countries. While several large economies like Germany and France are seeing declines, others such as Poland and Bulgaria are thriving. The dynamics of each country’s market are shaped by a mix of local economic conditions, interest rates, and housing supply and demand factors.
Looking ahead, the market is expected to remain volatile, particularly as the effects of inflation, rising interest rates, and government housing policies continue to play out across the region. Countries with stable economic growth and favorable housing conditions, like Poland and Bulgaria, may continue to see positive trends, while those facing economic challenges may experience further declines.