EU House Prices Are Rising Faster Than Rents. Housing Is Not More Affordable

House prices across the European Union continued to rise faster than rents in the first quarter of 2026. Eurostat reported on July 2 that house prices were up 5.1% from the same quarter a year earlier, while rents increased 3.0%.

That gap shows a difference in the pace of price growth, not proof that housing became affordable. Buyers still face higher purchase prices, deposit requirements and borrowing barriers. Renters still face rising monthly costs, even where rents are increasing more slowly than sale prices.

Prices rose faster than rents

Compared with the fourth quarter of 2025, EU house prices rose 1.2% in the first quarter of 2026. Rents rose 0.7% over the same period.

Eurostat also compared the first quarter of 2026 with the 2025 annual average. On that basis, house prices rose 2.9% and rents increased 1.8%. House prices rose more than rents in 19 EU countries with available data.

Portugal recorded the largest house-price increase in that comparison, at 10.3%, followed by Bulgaria at 9.4% and Slovakia at 9.1%. France and Finland were the only countries where house prices fell, declining 0.5% and 1.8%, respectively.

Rent increases were uneven. Croatia recorded the largest rise, at 21.9%, followed by Bulgaria at 6.4% and Greece at 5.0%. Rents fell in Slovenia and were unchanged in Finland.

Those country figures are not interchangeable with the EU-wide 5.1% year-over-year comparison. They use the 2025 annual average as their reference point. Eurostat also cautioned that Greece does not have transaction-based house-price data; Bank of Greece valuation data were used to estimate European aggregates.

Why the gap does not equal affordability

Affordability depends on more than the latest change in rent or sale prices. Household income, interest rates, required deposits, construction costs, available land and the supply of homes all affect what people can pay. A household may be unable to buy even when prices are rising more slowly than before, while a renter may still face financial strain after a smaller annual rent increase.

In a policy brief released July 3, the OECD said housing affordability pressures reflect an imbalance between supply and demand. It pointed to rising construction costs, labor shortages in construction, higher borrowing costs, restrictive land-use policies, limited land in high-demand areas and low public investment as factors that constrain new housing.

The OECD also said the market alone has not resolved the affordability gap. Expanding affordable and social rental housing is part of the policy response, including by mobilizing vacant or underused properties and using public and private funding to support new homes.

The organization said social rental housing can protect lower-income and vulnerable households while also easing upward pressure on housing costs. Its analysis is policy guidance, not a binding decision for EU member states.

EU supply policy remains in development

The European Commission announced July 1 that it is collecting evidence for a planned Housing Simplification Package due in 2027. The initiative is intended to examine ways to reduce unnecessary costs, delays and administrative burdens that affect housing supply and affordability.

The Commission said the work will seek input from national, regional and local authorities, housing providers, planners, builders, financial institutions, property owners and tenant groups. The package remains under development. It is not an enacted housing reform, and its practical effect will depend on the measures ultimately proposed and how governments implement them.

For households, the immediate lesson from the new data is straightforward: slower rent growth than house-price growth does not make housing affordable. The relevant question is how total housing costs compare with income and whether households can access suitable homes at prices they can sustain.

Eurostat’s next comparable EU-wide release, covering the second quarter of 2026, is scheduled for October 1, 2026.

Sources

• Eurostat: House prices and rents continued to rise in Q1 2026
• OECD: Tackling the affordability gap through increased supply of affordable and social housing
• European Commission: Housing supply simplification package
• Euronews: House prices and rents in early 2026