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REVEALED: Where in Europe have house prices and rent costs increased the most?

Is it time to buy a property in Italy, Cyprus or Greece? House prices have shot up across Europe in recent years but there are major differences between certain countries.

REVEALED: Where in Europe have house prices and rent costs increased the most?
Italy is one of the few countries where property prices have decreased compared to 2010. (Photo by Nils Schirmer on Unsplash)

House prices have risen by an eye-watering 45 percent, and rents by 17 percent, across the EU since 2010, the latest figures released by the EU statistical office Eurostat reveal.

However, there are major differences among countries. In Austria, house prices have more than doubled and rents have increased by 45 percent compared to over a decade ago. In other countries, they have stalled or declined over the same period.

Greece is a notable example, with prices plummeting by 23 percent and rents by 25 percent between 2010 and 2021.

In Italy, house prices have fallen over overall since 2010 although like much of the EU they have been rising again in recent years.  Rent prices in Italy have registered only a modest increase, while Spain has recorded very small rises in both rents and house prices.

Here is the situation in the countries covered by The Local, according to Eurostat.

Finding a new home abroad?

Between 2010 and the first quarter of 2022, house prices have more than doubled in Austria (+114 percent) and have grown even more in Estonia, Hungary, Luxembourg, the Czech Republic, Latvia and Lithuania.

READ ALSO: EXPLAINED: What you need to know about buying property in Germany

In Germany, house prices shot up by a hefty 94 percent, in Sweden by 92 percent and in Norway by 91 percent.

Denmark (59 percent) and France (29 percent) also recorded double-digit growth.

Spain was the country with the smallest rise, 3 percent, among those countries covered by The Local.

Over the same period, prices have declined in Italy (-10 percent), Cyprus (-8 percent) and Greece (-23 percent).

READ ALSO: EXPLAINED: The hidden costs of buying a home in Italy

According to Italian real estate agency Tecnocasa, house prices in the country are now 29 percent lower than in 2010, even though a slow upward trend started in 2017. Only Milan bucks the trend, with an 8.5 percent increase between 2010 and 2021.

The reasons behind these data, according to Fabiana Migliola, director of Tecnocasa’s research unit, are dwindling salaries and low capital availability, with most buyers being able to afford properties of up to €250,000.

“Of course, a modest growth of real estate and lower prices compared to many other countries inside and outside of Europe make our country attractive to investors,” Migliola said. “This is a phenomenon we have recorded above all in the holiday home market, as 2021 signalled an increase in the number of holiday homes purchased by foreign buyers, especially from the US, France and Eastern Europe.”

2022 could be a year of adjustment, she continued, but rising interest rates could have an impact on buyers who finance their home purchases with a mortgage.

Looking at prices, the agency forecasts a recovery with a rise between 2 and 4 percent, with high demand currently from Italians.

Scaffolding on a high-rise apartment block

Austria has seen the highest average rent increase over the last 12 years. (Photo: Tobias SCHWARZ / AFP)

Where is it cheaper to rent?

Rents have not risen quite as much as house prices, but they have risen steadily since 2010.

Between 2010 and 2022, rent increased by 17 percent on average across the EU. The highest growth among the countries covered by The Local was in Austria, with a whopping 45 percent rise. Denmark (21 percent), Sweden (21 percent), Germany (17 percent) and Switzerland (10 percent) also experienced a double-digit rise.

READ ALSO: Property: How to find a rental flat when you arrive in Austria

Increases were more modest in Italy (7 percent), Spain (5 percent) and France (8 percent).

The highest growth was in Estonia (177 percent), Lithuania (127 percent) and Ireland (77 percent).

On the other hand, in Greece, rents decreased by a quarter over the period, and Cyprus recorded a -1 percent.

The problem of affordability

While average increase rates only give a partial picture of the real estate market, an additional indicator cited by Eurostat is the housing cost overburden rate, the percentage of people spending 40 percent or more of their disposable income on housing.

READ ALSO: 5 of the most affordable places to buy property in France

Despite its plummeting house prices and rents, Greece had the highest rate in 2020, with one in three people (33.3 percent) spending 40 percent or more of their income on housing.

Other European countries with a high-cost overburden rate are Denmark (14 percent) and Switzerland (14 percent).

Just below the 10 percent line stand Norway and Germany (9 percent), Spain (8 percent), Sweden (8 percent) and Italy (7 percent).

Despite the significant rise, Austria has a relatively low-cost overburden rate, at 6 percent.

How has Brexit impacted British buyers?

For British citizens, Brexit may have added difficulties to the purchase of properties in EU locations. Countries such as Austria have specific restrictions for non-EU citizens and where there are no restrictions, higher taxes and new immigration rules may result in fewer British buyers entering the market.

In Spain, it was reported this week that purchases by British residents, which used to make up almost a quarter of all transactions (24 percent), now only account for 12 percent.

However, a recent survey among 900 British buyers found that only 4 percent had given up plans to purchase a property abroad due to the difficulties caused by Brexit and the Covid-19 pandemic. Some 11 percent went ahead as planned last year and 85 percent are still planning to buy.

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This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.

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PROPERTY

Where to find property in Switzerland for under CHF 500k

Switzerland is not known for being a cheap country and property prices are higher than in other European countries, but it's still possible to find property bargains, some for even under CHF 100k.

Where to find property in Switzerland for under CHF 500k

Property prices are rising in much of Europe and Switzerland is no exception. As the average salary is high in Switzerland, finding homes for under CHF 1 million in some parts of the country becomes almost impossible.

Even when you do find cheap properties, they are sometimes quite literally too good to be true. For example, Switzerland’s famous one-franc home scheme had to be scrapped after nobody signed up. The cheap homes were, actually, too expensive when considering the costs for renovation or even how remote they were.

READ ALSO: Six no-gimmick websites that help you save money in Switzerland

Some of the properties in the scheme weren’t connected to the electricity grid, sewer system or even roads.

So, where can we find cheap(er) homes in Switzerland – that are still liveable or could be excellent investments for those who enjoy fixer-uppers (or huge DIY projects)?

Not an easy search

To find these gems, we used a property website that allowed us to search for real estate in the whole of Switzerland (instead of just a few main cities) and showed us homes with at least three rooms.

The price limit was set at CHF 500,000 (while our colleagues in Germany had theirs set at €100k, but, hey, this is Switzerland).

As of August 2022, we found 203 houses and 80 apartments following these criteria on sale.

Most of these definitely need some fixing up, but you can still snatch a home for under CHF 500,000 with lovely views of lakes and mountains or big terraces and gardens.

Going through the addresses with some of the properties, some things stand out:

Head for the border – most of the most affordable places are in Italian-speaking Switzerland. However, you can also find some of them in the French regions. In both cases, they are located very near the border with France or Italy.

Forget about cities – All the properties we found are quite far from the major cities of Zürich, Bern, and Geneva, which makes sense as the cost of living tends to rise in those regions. If you’re looking for a cheap home, you’re highly unlikely to find one in city centres.

READ ALSO: EXPLAINED: Why is Switzerland so expensive?

Consider property type – It is also worth mentioning that there seemed to be a distinction between the homes in the west and those in the south. In the French region, there are more apartments and newer properties, with some outstanding options.

While in the Italian south, most of the properties are houses – and you need to inspect well because some will need a lot of work.

Research services – You should definitely check carefully the property’s location – some are not connected to basic services or even roads.

Renovation costs – Almost all of the properties we found were ‘renovation projects’. Some can turn out to be very good investments, but it takes time and work to renovate. Before buying, get an estimate of the likely works so you can see whether the property really will save you money in the long term, and be honest about your level of DIY/building skills and how much work you are willing or able to do.

Extra costs – Besides renovating costs, you must be mindful of property taxes and other living costs and how much they are in the region where you are buying property. Prices can vary quite widely depending on the canton, so research well.

You can check all our Property in Switzerland stories here.

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