Overview of the Property Index Initiative
The Property Index – Overview of European Residential Markets is Deloitte’s 14th annual review of residential real‑estate trends across Europe, including Israel and Turkey. Compiled by a network of Deloitte real‑estate professionals and researchers, the publication offers a comprehensive analysis of housing prices, rental levels, construction activity, mortgage conditions and sustainability factors. The authors include Miroslav Linhart (Partner, Real Estate Advisory), Petr Hána (Director, Real Estate Advisory), Lukáš Machula (Senior Associate, Real Estate Advisory) and David Marek (Director, Financial Advisory), all based in the Deloitte Central Europe office. Their expertise spans market research, financial analysis and economic development, ensuring the data are drawn from official sources and Deloitte’s own field teams.
Key Findings on Housing Prices
Across the 28 participating countries, Luxembourg leads the continent with the highest average bid price for new dwellings at €8 760 / m², followed by Israel (€6 131 / m²) and the United Kingdom (€5 203 / m²). At the opposite end, Turkey remains the most affordable market at €949 / m², with Bosnia and Herzegovina (€1 482 / m²) and Albania (€1 620 / m²) also low. City‑level data show Tel Aviv as the priciest city (average €13 970 / m²) and Ankara as the cheapest (average €905 / m²). Price growth varied widely: Poland recorded the strongest year‑on‑year increase (19.3 %), while Turkey experienced a 12 % decline, the only notable price drop.
Rental Market Dynamics
Rental prices are highest in Luxembourg City (€43.4 / m²), Paris (€32 / m²) and Dublin (€31.7 / m²). In contrast, Durrës, Vlorë, Ankara and Plovdiv have the lowest rents (around €5 / m²). Rental growth was most pronounced in Banja Luka (+37.8 %), Vlorë (+25 %), and Debrecen (+24.8 %). Some markets, such as Antwerp and Istanbul, saw rental declines of 6–6.5 %, reflecting local supply shifts. Overall, rent increases outpace inflation in many regions, intensifying affordability pressures.
Construction Activity and Housing Stock
Housing development intensity differed sharply. Turkey led with 6.85 new dwellings per 1 000 citizens, followed by Israel (5.62) and Poland (5.33). Ireland topped housing starts with 12.84 per 1 000. Conversely, Bosnia and Herzegovina, Hungary and Spain recorded fewer than two completions per 1 000. At the national level, Turkey completed the most new dwellings (≈ 586 900), while Bosnia and Herzegovina reported the fewest (≈ 3 400). Housing stock per 1 000 citizens averages 450 across 17 reporting countries; Bulgaria has the highest (672) and Greece the lowest (288). The report notes a record number of participating countries, expanding geographic coverage.
Mortgage Rates and Financial Conditions
Average mortgage rates across surveyed markets total 4.36 % (simple average). Hungary has the highest at 9.35 %, with Poland (7.67 %) and Romania (6.89 %) also above 5 %. The lowest rates are in Bulgaria (2.83 %), Croatia (2.86 %) and Turkey (3.01 %). Rate movements in 2024‑2025 show significant hikes in Hungary (+195 bps) and modest rises in Turkey and Portugal (+83 bps each). Conversely, Serbia, Romania, Italy, Luxembourg and the Czech Republic recorded declines of 70–82 bps. The data illustrate divergent monetary policy responses across Europe.
Sustainability and ESG Trends
Energy‑efficiency and green building standards are increasingly embedded in new projects. The Index highlights widespread adoption of passive‑house designs, heat‑pump installations, solar panels and district‑heating systems, especially in Austria, Belgium, Finland and the Nordic countries. Regulatory incentives, such as energy‑performance certifications, are driving higher construction costs but also improving long‑term operating expenses. The report stresses that sustainable design is becoming a baseline expectation rather than a niche feature, influencing both price levels and investor interest.
Regional Contrasts and Affordability Gaps
Affordability analysis shows stark disparities. In Amsterdam, buyers need 15.4 gross annual salaries for a 70 m² new home, the least affordable city. Athens (15.3) and Prague (15.0) follow. More affordable cities include Odense (Denmark) and Turin (Italy), where only 4.9 salaries are required. The number of salaries required varies from 4.9 to 15.4 across the 75 cities examined, underscoring divergent income‑price ratios. The Index also points to a growing gap between rental demand and supply, especially in urban centers, prompting policy discussions on rent regulation and social‑housing expansion.
Outlook for 2025 and Beyond
The report projects moderate economic recovery across Europe, with GDP growth around 0.8 % in 2025 and inflation easing toward 2 %. Housing markets are expected to remain resilient but uneven, with price stabilization in many western economies and continued growth in emerging eastern markets. Mortgage rates may decline modestly if central banks maintain easing cycles, potentially easing financing constraints. However, supply shortages, especially in high‑demand cities, are likely to keep upward pressure on both sale and rental prices. Sustainable construction is anticipated to gain further traction as EU policies promote carbon‑neutral building standards.
Implications for Sustainable Housing Stakeholders
For investors, developers and policymakers focused on sustainable housing, the Index provides critical benchmarks: high‑price markets offer premium opportunities for green‑building premiums, while low‑price, high‑growth regions (e.g., Poland, Turkey) present volume‑driven prospects. Mortgage rate differentials suggest varying financing costs across the continent. Rental market trends highlight the need for affordable, energy‑efficient units to meet rising demand. Overall, the Deloitte Property Index delivers a data‑rich foundation for shaping Europe‑wide strategies that balance market performance with environmental stewardship.