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Home values are increasing throughout Europe. High-end residences are also experiencing this trend. Top-tier property prices are rising in major European cities. In over half of the approximately 50 cities monitored by Knight Frank’s Wealth Report 2026, annual price increases surpassed 3% in 2025.

Which cities are leading the increase in high-end property values throughout Europe? How do European luxury real estate markets measure up against those in other parts of the globe?

High-end properties are the most sought-after and costly real estate within a specific area. They are typically categorized as the top 5% of the market based on value. Prime markets often attract a substantial number of international buyers.

Prague experienced the greatest rise

Knight Frank’s Prime International Residential Index monitors 100 cities across the globe, including 47 in Europe. Prague, the capital of the Czech Republic, experienced the highest increase in property values among European cities, with prices increasing by 14.6% in 2025.

Méribel in France (9%), Porto in Portugal (8.5%), and Marbella in Spain (8.1%) also experienced significant increases, all recording growth exceeding 8%.

A different French ski destination, Courchevel 1850, also experienced a significant increase of 6.9%.

Florence in Italy and Lake Como both saw rises of 6.7% and 6.5% respectively.

Gstaad in Switzerland (5.5%), Rome in Italy (5.5%), and Quinta do Lago in Portugal (5.2%) all experienced increases exceeding 5%.

The leading 10 European cities in the index have something in common: alpine ski areas, Portuguese golf getaways, and charming cultural hubs are featured on the list.

London experienced the greatest drop in Europe

Not every European city experienced increases. London had the biggest drop, as top property prices decreased by 4.7% in 2025.

“London is changing as modifications in tax regulations for affluent residents lead to reduced budgets and prompt some individuals to explore renting instead of purchasing property,” the report stated.

Ibiza, Jersey, and Lausanne also experienced slight decreases ranging from 1% to 2%.

In addition to other European capitals, Madrid recorded a 5% increase, Oslo saw a rise of 4.2%, and Berlin experienced a growth of 3.4%. The increase was less significant in Lisbon with 2.7%, Dublin at 2.3%, Vienna with 1.3%, Paris also at 1.3%, and Bucharest with 0.4%. Stockholm faced a minor decrease of 0.7%, while property prices in Edinburgh stayed the same.

Winners of lifestyle and resort destinations

The top choices in Europe are lifestyle and resort locations.Alpine ski resortsand Mediterranean sunshine locations lead the top of the rankings. Italian cities also emerge as a notable group.

Major financial hubs present a different scenario. London, Stockholm, Paris, and Milan are all performing significantly worse compared to vacation destinations.

Tokyo is global outlier

Tokyo is unique on a global scale. The cost of prime real estate in Japan’s capital increased by 58.5% in 2025. According to the report, Tokyo’s newly constructed apartment market has seen growth due to limited availability, low interest rates, and significant incoming demand from the Asia-Pacific region.

Dubai placed second with a 25.1% increase — however, the data was collected before the US-Israel attack on Iran and Tehran’s following reaction towards Gulf nations.

Manila and Seoul also made it to the top five, with each experiencing increases of approximately 15-20%.

Prague completes the top five, standing as the leading European city on a global scale.

“In various markets, high-end residential real estate has moved ahead of the overall housing market, supported by the growth in wealth,” said Liam Bailey, editor of The Wealth Report.

Although traditional markets continue to face broader economic challenges, the rate at which wealth is being created is supporting stronger demand for high-end real estate, despite recent fluctuations in borrowing costs.

Major losses in China and Canada

Guangzhou in China experienced the biggest drop, with top property prices decreasing by 12.2%. Shenzhen (7.2%), Shanghai (5%), and Beijing (4.9%) are also listed among the most significant declines worldwide, indicating a widespread slowdown in Chinese cities.

Toronto and Vancouver in Canada both experienced drops of approximately 7%.

EU house prices rose 5.5% per year in the last quarter of 2025, with tourist-oriented markets such as Portugal, Croatia, and Spain experiencing even higher increases, as reported by Eurostat.