Interest rates will weigh on house prices in Europe for a long time. This was stated in the S&P report 'European Housing Markets: Sustained Correction Ahead'. According to Standard & Poor's analysts, housing values will hit rock bottom by the end of 2024. The rating agency believes that rising interest rates in Europe will lead to a sustained correction of nominal house prices in most countries on the continent.
Rising mortgage interest rates, what consequences for house prices
According to S&P, 'rising mortgage rates are the main cause of weakening demand and falling prices'. Despite this, "potential demand and housing needs in Europe remain high". For the rating agency, there are some mitigating factors to this trend, the main ones being "the generally slow transition of non-performing loans to household balance sheets, thanks to the often high shares of fixed-rate contracts in the total, and the continued strength of European labour markets".
The Standard & Poor's report points out that, "in a market that will remain subject to higher borrowing costs in real terms even after renewed central bank rate easing, a stronger rebound in house prices is unlikely after the correction has run its course". According to the rating agency, there will be no slumps, however, but the declines will be substantial, peaking at "around 12% in Germany and the UK" and averaging above 8% almost everywhere by the end of 2024.
One particular consideration concerns Italy, where - according to S&P - "government subsidies for energy efficiency measures triggered a strong rebound in demand at the beginning of this year, which will gradually fade until mid-2025. As a result, the correction in Italy will be delayed and will be less pronounced", meaning about 6.3 per cent from the peak.
S&P's forecasts for 2023-2025 published in recent months spoke of declines in house prices in various European countries and excluded a rebound in the next three years, pointing out that the price adjustment linked to higher interest rates could take years due to other factors contributing to house prices.
Property for sale in Italy with gardens
Italy is known for its beautiful landscapes, and many properties for sale come with gardens of varying sizes and styles. These gardens can range from small courtyards to expansive estates with lush greenery, fruit trees, and even vineyards.
The 5 Italian regions with the fastest rising house prices
The trend in Italian house prices in 2024 and 2025 confirms a clear pattern: the North is driving growth, while Central and Southern Italy show more moderate expansion, with some regions even experiencing a decline.
Buying a home in Italy costs 16% more in 2025 compared to 2019
Buying a home in Italy is becoming increasingly expensive. Compared to 2019, the average cost of purchasing a property has risen by 16%. Milan remains the most expensive city per square metre, while Trieste has recorded the sharpest increases. According to a study conducted by the Centre for Training and Research on Consumer Issues (C.R.C.) in collaboration with Assoutenti, an average worker now needs 11.6 years of salary to buy a home, a clerk requires 9.7 years, while a manager needs only four
From London to Mussomeli for a 1 euro house: "I'll never have a mortgage again"
George Laing is a 30-year-old Englishman who took part in Italy's 1 euro house project by purchasing a property in Mussomeli, in the heart of Sicily. From there, a great adventure began, as he is carrying out the renovation himself, "watching videos on YouTube." This has gained him significant popularity on Instagram, to the point that he will soon appear on one of the UK's main television channels for a property-themed series.
Why one in four Italians wants to move house
According to the RE/MAX European Housing Trend Report 2024, the lack of balconies and gardens, combined with rising energy costs, is fuelling housing dissatisfaction in Italy and across Europe. In line with the European average, 24% of Italians want to move home. Among them, 17% plan to relocate within a year, while 28% are considering moving abroad to improve their financial situation.
Cheap houses for sale in Italy by the sea
Waking up each morning to breathtaking views of the Italian coastline feels like a dream come true. Italy is home to some of the world's most stunning coastal landscapes, stretching from Liguria to Puglia and encompassing the spectacular islands of Sicily and Sardinia. Despite the current economic climate with rising house prices in 2025, now is still an excellent time to explore cheap seaside properties in Italy, with many hidden gems available. Given Italy’s vast coastline, it’s no surpris
The best mountain towns to live in Sicily
Sicily is not just about the sea and beaches: there are many mountain areas full of charm and tradition that offer a peaceful and authentic lifestyle. Living in the mountains in Sicily means enjoying breathtaking landscapes, fresh air, and a slower pace of life, far from the chaos of the cities. Today we're taking a look at 5 of the villages to consider when looking for a home, along with their unique features. These are the best mountain towns to live in Sicily.