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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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‘A life’s task’: The lessons learned from turning a crumbling Italian church into a home

Back in 2000 Marilisa and Riccardo Parisi, a Neapolitan couple in their 60s, snatched up a dilapidated little church in Umbria which had been abandoned for 50 years. They tell Silvia Marchetti exactly what they learned so others can heed their advice.

'A life's task': The lessons learned from turning a crumbling Italian church into a home
An old crumbling Italian property dating back to medieval times with all its historic appeal and fascination lures anyone with a penchant for bringing back ancient buildings from the grave.
 
But it can be tough work with many obstacles requiring energy, time, lots of money and above all, patience.
 
Back in 2000 Marilisa and Riccardo Parisi, a Neapolitan couple in their 60s, snatched up a dilapidated little church in Umbria which had been abandoned for 50 years and upgraded it to their lavish rural house, with a cool cocktail lounge under the former altar and master bedroom in what used to be the bishop’s private lodgings.
 
The church, with the original bell tower still hanging and well-preserved frescoed walls, is actually the center of a tiny hamlet isolated in the countryside near Gubbio featuring stables, a barn and storage room which were also renovated and a wide patch of land with olive groves. 
 
“It was all a heap of ruins but I fell in love with the place at first sight,” says Marilisa.
 
“I could feel it had a soul and the stones were ‘talking’ but I knew straight away it was going to be a long, hard work to fix it up”, she said.
 
It took the couple 7 years to complete the restyle and faced with the many challenges encountered along the way, they admit they often thought of giving up. 

Riccardo and Marilisa Parisi at their Umbrian home. Photo Marilisa Parisi
 
Old properties, which are rendered more impressive by the passage of time, naturally come with downsides.
 
Dilapidated homes have a strong allure but breathing new life into them isn’t always as easy as first imagined, warns the couple.
 
Their church-house, which the Parisi bought off the local curia (diocese), is classified as a monument of historical and artistic value by Italy’s state.
 
The first obstacle was dealing with Umbria’s art authorities (sovrintendenza) to make sure the restyle plan respected the structure and architecture of the place. 
 
They warned that the older a property is, the higher the risk that it could potentially be of artistic and historic interest, which entails a significant amount of restrictions (vincoli) and rules imposed by the sovrintendenza in restyling it, and more paperwork than an ordinary property. 
 
The Parisi’s advice to people interested in following in their footsteps is to check beforehand whether the local art authorities may have jurisdiction over an old property, which could complicate and delay the renovation. 
 
“You can’t just sketch any kind of super-cool restyle that pops into your mind,” says Riccardo.
 
“When the art authorities are involved, even if the property is yours, you must draw up detailed plans and maps of how it will look like, what the restyle will entail, what building materials will be used, and share these with the authorities.
 
“So you need to employ architects specialised in preservation. It must be a minimal, sustainable renovation that doesn’t radically change the original structure with excessive fixes,” he adds.
 
So tearing down walls, adding extra rooms or pulling down a roof won’t be possible.
 
Marilisa says: “We tried to recycle the original furniture and materials, we kept the ancient stone steps outside in the courtyard, the old wooden tables of the church which we turned into thick doors, the original terra-cotta pavements and the church altar hall where we have evening drinks.”
 
She admits that having to deal with the construction team on a regular basis was a major hassle, particularly since they had to drive from Naples each time to check on the progress of the work.
 
The couple felt the stress that comes with renovating a property at a distance, by phone or internet without physically visiting and overseeing the builders and architect. It can be risky as key instructions can easily go missing.
 
They suggest it is very important to hire construction teams that can do the entire work rather than splitting it among different building companies so to assure continuity and a homogenous makeover style and techniques. 
 
“If you take on such a challenge of renovating a large property you must make it your life’s task and invest a lot of passion, energy and be ready to spend more than expected”, says Riccardo, who prefers not to disclose how much money has been invested. 
 
The specific location of the property can also be an issue. Bureaucracy was head-splitting, the couple had to not only reactivate utility supplies but rebuild all basic infrastructure because their home is in an isolated spot in the middle of a dense Umbrian forest.
 
“The place is wonderful, surrounded by pristine nature, there’s nothing around us and that’s a major plus point. But having been abandoned for so many years there was no running water, electricity, gas, so to make our home liveable again we had to rebuild the water pumps and electricity grid, activate a landline and internet,” says Riccardo.
 
“These are all things you need to consider when you embark on such a mission.”
 
Roads are another problem to be taken into account. It’s difficult to find the place, one needs to follow the directions given by the Parisi as it’s not mapped.
 
There’s just a tiny unpaved country path leading to their Umbrian retreat from the main road which they had to clear through the thick vegetation that had grown over the property’s estate across decades. The path is wide enough for one big car and needs constant maintenance particularly when it rains. 
 
“If you buy and renovate a lovely crumbly property in an offbeat, isolated rural spot you have to know that you’re starting from scratch”, says Riccardo. 
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