Housing construction costs across Europe increase by 48% over a decade

According to the latest edition of Eurostat’s Key Figures on European Business 2026, the producer price index for the construction of new residential buildings increased by 48.2% between 2015 and 2025, reflecting the overall change in costs faced by construction companies.

This index measures the prices of construction work from the contractor’s perspective and is based on the amounts paid by clients for the construction of new residential buildings, excluding collective housing such as student residences and nursing homes. It is one of the most important indicators for monitoring cost developments in the construction sector and has a direct impact on both investment decisions and the final prices of residential properties.

The Period of the Sharpest Cost Increases

Although the overall increase of nearly 50% spans the entire decade, the most significant cost escalation occurred within just three years. Prices rose by 5.8% in 2021, followed by the largest annual increase of the decade—12.2%—in 2022, while a further increase of 6.9% was recorded in 2023.

These developments were largely driven by the disruptions caused by the COVID-19 pandemic, global supply chain constraints, soaring energy costs, and substantial increases in the prices of key construction materials such as steel, cement, and timber. At the same time, several European countries experienced shortages of skilled labour, further increasing overall construction costs.

Over the past two years, however, the pace of price increases has slowed. Construction prices rose by 2.3% in 2024, while growth moderated further to 1.3% in 2025, suggesting that the market is gradually returning to more stable conditions following the severe disruptions of the previous period.

Significant Differences Across EU Member States

Behind the European average lie considerable disparities among EU Member States. Bulgaria recorded the highest increase in residential construction costs, with prices rising by 166.1% over the decade. It was followed by Hungary with an increase of 155.4% and Romania with 130.7%.

These countries experienced strong economic growth, robust construction activity, and substantial wage increases within the construction sector, all of which contributed to the remarkable rise in costs.

At the other end of the spectrum, the smallest increases were recorded in Italy (+17.0%), Greece (+17.3%), and Finland (+22.1%).

The Greek Perspective

Greece recorded the second-lowest increase in construction costs within the European Union, which may initially suggest that the domestic market remained relatively stable. However, this picture requires careful interpretation.

Following the financial crisis, the Greek construction industry experienced a prolonged period of deep recession, characterised by a significant decline in construction activity and limited new investment. As a result, construction prices in 2015 were already at a relatively low level compared with many other European markets.

In recent years, construction activity has recovered, supported by stronger demand for new housing, increased investment in tourism, energy-efficiency renovation projects, and greater activity in the real estate market. Although Greece’s overall ten-year increase remains modest by European standards, industry professionals have nevertheless experienced substantial increases in the prices of key construction materials and labour costs, particularly during the 2021–2023 period.

Implications for the Real Estate Market

Rising construction costs affect every stage of the residential property market. For developers, they translate into higher project implementation costs and the need to revise budgets. For investors, they require greater capital commitments, while for homebuyers they often result in higher prices for newly built homes.

At the same time, higher construction costs may slow the development of new residential projects, particularly when combined with elevated financing costs and reduced household purchasing power. Conversely, the gradual easing of cost increases over the past two years has created expectations of greater stability in planning future investments.

Although the exceptional price increases recorded during 2021–2023 appear to have subsided, significant challenges remain for the European construction industry. The energy transition, stricter requirements for more sustainable and energy-efficient buildings, shortages of skilled labour, and continuing uncertainty in international markets continue to influence production costs.

Eurostat’s data indicate that the market is entering a period of more moderate price movements, although costs are unlikely to return to the levels seen in the previous decade. For construction companies, investors, and prospective homebuyers alike, monitoring developments in construction costs will remain a critical factor in informed decision-making.