European home prices fall but don't bet on a crash

Across a swathe of European countries, it’s been a common complaint: people can’t afford to buy their own home.

Rising inflation, a surge in interest rates and a cost-of-living crisis over the last two years have compounded the continent’s long-established property problem.

European house prices have been on a seemingly relentless upward curve for close to a decade with much of the surge driven by institutional investors. Since the first quarter of 2015, when prices rose rapidly, EU house prices have increased faster than rents in every quarter until the second half of 2022. In total, average EU house prices rose by 43% in that period.