EU Housing Costs Keep Rising

House prices in the European Union rose by 5.1% year on year in the first quarter of 2026, while rents increased by 3%. The market continued to recover from the 2022–2023 correction, but prices are again rising faster than rents, intensifying the affordability problem for households.

EU house prices gained momentum

Eurostat reported that EU house prices rose by 5.1% in the first quarter of 2026 compared with the same quarter of 2025. Rents increased by 3% over the same period. Compared with the fourth quarter of 2025, house prices were up 1.2% and rents rose 0.7%. Between the 2025 annual average and the first quarter of 2026, house prices increased by 2.9%, while rents rose by 1.8%.

For the market, this confirms that the rebound after the 2022–2023 cooling phase is continuing. Housing is again becoming more expensive faster than rents, making ownership harder for households that depend on mortgages and savings. It also changes the economics of property investment, as entry prices rise faster than rental income.

Portugal, Bulgaria and Slovakia led price growth

At country level, the gap was particularly visible. Compared with the 2025 annual average, house prices rose faster than rents in 19 EU countries with available data. The largest house-price increases were recorded in Portugal at 10.3%, Bulgaria at 9.4% and Slovakia at 9.1%.

Only France and Finland recorded price declines. House prices fell by 0.5% in France and by 1.8% in Finland. That makes Europe’s housing recovery uneven: some countries are moving back into rapid growth, while some large and northern markets remain weak.

Annual figures show an even sharper contrast. In the first quarter of 2026, house prices rose in 25 EU countries and fell only in Finland, where prices declined by 2%. The strongest year-on-year increases were recorded in Portugal at 17.8%, Bulgaria at 14.8% and Slovakia at 14.4%.

Rents rose in almost every EU country

Rents increased in nearly all EU countries. The only exceptions were Slovenia, where rents fell by 0.9%, and Finland, where they were unchanged. Among the remaining countries, the highest rental increase was recorded in Croatia at 21.9%, followed by Bulgaria at 6.4% and Greece at 5%.

Croatia stands out. The sharp rise in rents may reflect tourism demand, limited supply in popular cities and coastal areas, and competition between long-term and short-term rental markets. For residents, that means higher monthly housing costs even where purchase prices are not accelerating at the same pace.

Bulgaria ranked among the top countries for both house-price and rent growth. That profile usually points to broad-based demand: housing is becoming more expensive as an asset, while rental housing is also becoming more expensive as a basic household service. For buyers, the pressure works in both directions: waiting becomes costly, but buying is also harder.

The market has recovered from the downturn

The longer-term series shows that the current rise is part of a new phase after the strong 2015–2022 upswing and the later correction. EU house prices rose rapidly from early 2015 to the third quarter of 2022, then declined for two quarters before recovering. Since the first quarter of 2024, quarterly growth has been consecutive, reaching 1.2% in the first quarter of 2026.

The annual growth peak came in the first quarter of 2022, when EU house prices rose by 10.7% year on year. Growth then weakened and turned negative in the second and third quarters of 2023. The market returned to positive growth in 2024, reached 5.8% by the first quarter of 2025 and slowed to 5.1% in the first quarter of 2026 — still a high rate for a market where household incomes and mortgage conditions recover more slowly.

The house price index measures price changes for residential properties purchased by households, including flats, detached houses, terraced houses and other dwellings. It covers both newly built and existing properties, regardless of whether the buyer uses the home for owner-occupation or investment.

Real house prices are rising again

A key measure for assessing the market is house prices adjusted for inflation. This shows whether property values are rising faster than general consumer prices. In 2023, real house prices in the euro area fell by 6.9%, followed by a further 0.2% decline in 2024. In 2025, they rose by 3.1% above inflation.

That changes how the current phase should be read. If prices rise only in nominal terms, part of the increase reflects general inflation. If they rise faster than inflation, housing becomes more expensive relative to other household costs. For families, that means down-payment savings must grow faster than wages and consumer prices.

In 2025, house prices rose less than inflation in only six EU countries: France, Luxembourg, Austria, Romania, Finland and Sweden. In all other EU countries, property prices outpaced inflation.

Affordability remains the main risk

Rising prices and rents show that the EU housing market is more active, but not necessarily more affordable. For homeowners, price growth supports asset values. For buyers, especially young families and residents of large cities, it raises the entry barrier. For tenants, rent growth directly increases monthly costs.

The pressure is especially acute in countries where purchase prices and rents rise at the same time. If house prices rise faster than rents, potential rental yields for new investments come under pressure. If rents catch up with prices, the burden shifts to households unable to buy and forced to remain in rental housing.

For EU governments, this is becoming a macroeconomic issue. Expensive housing affects worker mobility, consumer spending, birth rates, mortgage demand and bank stability. There is no simple fix: lower interest rates can support demand and reignite prices, while expanding supply requires time, land, permits and investment in construction.

As International Investment experts report, the first-quarter 2026 data point less to healthy normalization than to the return of an old European imbalance: assets are rising faster than basic housing affordability. The critical risk for 2026 is a new phase of divergence. Households with capital can secure property before the next price move, while renters and first-time buyers may keep chasing the market with weaker income growth, higher financing constraints and insufficient savings.