Portugal Leads EU Rise in House Prices Relative to Income

Portugal recorded the largest increase in house prices relative to household income in the European Union over the past decade. Its house price-to-income ratio index increased 60.8% between 2015 and 2025, according to new Eurostat data published on November 9. The Netherlands followed with 34.3%, Hungary with 26.5%, Czechia with 25.8% and Spain with 24.5%. Across the EU, the indicator rose by 6.8%.

Ten years of diverging national housing markets

The indicator increased in 17 EU countries and declined in the other 10. Romania registered the largest fall, at 42.8%, followed by Finland with 25.2% and Bulgaria with 16.2%. These figures compare changes in an index of residential property prices relative to an index of per-capita household disposable income, rather than the current price of a typical home.

The decade-long perspective is useful because recent quarterly property price changes only show short stretches of the market cycle. A housing market can experience a temporary slowdown while the cumulative distance between prices and incomes remains large. Investors, mortgage lenders and policymakers need both views to understand how much buyers can afford and where potential pressure has built up.

In Portugal, the cumulative rise in the ratio highlights why affordability has become a defining issue. Property markets in Lisbon, Porto and selected coastal areas attract domestic and international buyers, but construction and available housing stock vary substantially by city. A national index supplies a starting point for more local comparisons involving actual sales prices, wages, rental demand and new development.

The Netherlands, Hungary and Czechia stand out

The Netherlands posted a 34.3% increase in the price-to-income index, putting it second in the EU comparison. Hungary followed at 26.5% and Czechia at 25.8%. Spain's indicator rose 24.5%.

Eurostat measures income using adjusted household gross disposable income per capita. That is distinct from the headline national salary, the income of a particular age group or the earnings of a potential mortgage applicant. The denominator is crucial to interpreting the ratio. A country may experience rapid wage growth while property prices accelerate even faster.

The indicator is relevant to property investment because it reveals the direction of affordability pressure across the domestic buyer base. A high cumulative increase can make transactions more sensitive to mortgage rates, credit availability and the supply of smaller homes. It also provides context when assessing rental demand, although rents and asset-level yields need their own separate series.

Where the ratio moved down

Romania's house price-to-income indicator decreased 42.8% over the period. Finland recorded a fall of 25.2% and Bulgaria 16.2%. Falling ratios can reflect stronger income growth relative to prices or periods when property values weakened.

These movements do not place Romania, Finland or Bulgaria at the top of a ranking of cheapest homes. The Eurostat release does not compare absolute prices in euros or the current number of years of income required to purchase an apartment in each country.

The result remains valuable for identifying different national cycles. Some European markets became considerably less affordable relative to household incomes during the decade. Others moved in the opposite direction. For anyone considering an acquisition, the next stage is to examine specific city markets and financing conditions rather than treating the national index as a substitute for a valuation.

The long-term benchmark has almost been regained

Eurostat also publishes a standardised house price-to-income ratio, showing how far the indicator stands above or below its long-term average, calculated from 2000 or the earliest available year. This measure reached 7.9% above the average in 2007 and 7.4% in 2022. It fell to 6.4% below the benchmark in 2014.

Following the 2022 peak, the standardised ratio declined in 2023 and 2024 before moving just above its long-term average in 2025, at 0.03%. That EU-wide level may appear close to equilibrium. However, the country data show how different national property cycles have become.

The ratio is one of several indicators that can inform the EU's monitoring of macroeconomic imbalances. Mortgage costs, the level of household income and everyday housing expenses are necessary for a broader picture of affordability.

The new figures create a useful framework for cross-border investors. Portugal and the Netherlands have recorded substantial decade-long increases in prices relative to incomes. Romania and Finland have seen the ratio decline. Any investment decision will still depend on local sales evidence, financing, operating costs and achievable rent, but the direction of the national affordability indicator is a meaningful part of the analysis.

FAQ

What happened to Portugal's house price-to-income ratio? It increased 60.8% between 2015 and 2025, the highest rise in the Eurostat comparison.

Did the ratio rise throughout the EU? It rose in 17 countries and fell in 10, with a 6.8% increase for the EU as a whole.

Which countries saw the largest declines? Romania, Finland and Bulgaria recorded the biggest falls.

Does the indicator rank countries by current property prices? It describes change over time in the relative price-to-income index.