The European average home price was €5,666 per sqm during Q3, a 2.1% increase compared to Q1 2024, finds a report by Catella, which tracks 58 cities across 16 European countries.
At the same time, the unweighted monthly average rent stood at €19.70 per sqm, reflecting a 4.1% increase compared to Q1.
“In addition to the continued strong growth in rental prices, capital values are now also showing a marked upward trend. This is leading to an increasing stabilization of yields, with only isolated minor corrections expected. We are optimistic about the anticipated momentum in transaction markets, which should help stimulate construction activity,” says Dr. Lars Vandrei, Senior Research Manager at Catella Residential Investment Management (CRIM).
Geneva remains the most expensive residential market at €15,770 per sqm (+€120), followed by Zurich (€14,000 per sqm) and London (€13,930 per sqm). The most affordable housing prices are found in Finland: Lahti (€1,640 per sqm) and Jyväskylä (€2,380 per sqm).
At the same time, London remains the most expensive city for tenants, with an average rent of €37.60 per sqm (+€1.60), followed by Dublin (€35.00 per sqm) and Geneva (€34.70 per sqm). At the lower end of the price scale are Liège, Belgium, and Graz, Austria, with €11.00 per sqm each.
Meanwhile, prime yields for multifamily properties currently average 4.59% (unweighted), slightly up from 4.48% in Q1.
The report further states that the shortage of new homes and rising rents is triggered by a significant slowdown of new permits.
Over the past two years, building permits for residential space across Europe have significantly decreased compared to the previous period — by an average of 23%. Finland (-52%), Sweden (-48%), and Germany (-37%) are among the hardest-hit countries.
On the other hand, Portugal shows stable trends (+4%), and Spain demonstrates a markedly positive trend in new housing permits (+27%).
