Dynamic growth of house prices in CEE

Erste Bank Research Team Erste Bank

On the radar

Current account deficit in Czechia reached CZK -38.1 billion in May, while in Poland current account deficit was at PLN -1071 million.
Trade deficit in Poland in May was at PLN -1182 million.
Today, Slovakia will release inflation rate in June at 9 AM CET, while Poland and Croatia will show the details of June inflation.
Romania will publish year-to-date current account.

Economic developments

Today we look deeper into residential property prices in the CEE region that has been updated by Eurostat roughly two weeks ago. House prices across CEE have been on a steady upward trajectory. When we benchmark the Index to 2025, house prices in CEE were on average 6% higher compared to last year. The most dynamic price growth compared to last year was recorded in Croatia and Slovakia (close to 9%). The trend in the region has been broadly in line with the EU27 average but increase in house prices has been much swifter compared to the EU27 average (3% growth in 1Q26). When compared to Germany, where prices remaining broadly flat, house prices in region are developing more dynamically. The housing markets in CEE seem to benefit from stronger nominal income growth, easing financing conditions and resilient demand. While price growth has moderated compared to the rapid gains seen after the pandemic, house prices across CEE remain more elevated.

Market movements

Increased uncertainty on the global markets keep the Brent price of oil close to USD 85 per barrel. Geopolitical tensions translates into weakening of CEE currencies against the euro. Increase in price of oil may also limit the appetite for the rate cut in Poland. While Governor Glapinski suggested he could file such a motion in September (25 basis point cut proposal), rising commodity prices may limit the willingness of other central bankers to support the motion and also are likely to affect market expectations. FRA 9x12 slightly increased this week to 3.72% from 3.64% seen last Friday. In Romania political uncertainty persists ahead of Fitch Ratings review of rating and outlook (due July 31).

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Erste Bank Research Team

Erste Bank

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