Where in Europe can you still afford to buy or rent an apartment? To answer this question, researchers analyzed more than 22 million real estate listings from 31 European countries and compared apartment prices with the average incomes of residents in each region.
Researchers from the Vienna University of Technology took into account the fact that the price per square meter varies depending on the size of the apartment. Based on this, they created maps showing how large an apartment one can afford with the average income in a given region. It is easy to see clear differences across Europe.
Causes of the Housing Crisis
In recent years, many countries and regions around the world have begun to grapple with a housing affordability crisis. In Europe, real estate prices have been rising faster than residents’ incomes for over a decade. More and more people are finding it difficult to buy their own home. Following the 2008 global financial crisis, real estate prices in many European cities skyrocketed. The situation was further exacerbated by rising mortgage interest rates, a response to high inflation following the COVID-19 pandemic and Russia’s full-scale invasion of Ukraine. At the same time, rents have risen, limiting housing options for young adults and others who are just entering the housing market. However, the situation is not the same everywhere. Housing markets vary significantly by region, and real estate prices in large cities—especially in capital cities—often far exceed those in other parts of the country. The same is true in popular tourist regions.
The housing problem has become so pressing that it has also gained prominence in European Union policy. The European Commission has made housing one of its priority areas at the EU level.
Where in Europe can one still afford housing?
The authors of the study created maps showing how much living space one can afford on an average income in a given region. In their analysis, they also took into account the fact that the price per square meter depends on the size of the apartment—smaller units can be proportionally more expensive than larger ones. The researchers drew on previous analyses, refining the method for calculating housing affordability to account for this relationship.
The aim of the study was to identify regions where buying or renting an apartment poses the greatest financial burden and to recognize spatial differences in housing affordability across Europe. There were no surprises.
As expected, buying a home in a large city is significantly more difficult than in rural areas. High real estate prices are not limited to the cities themselves. They also extend to neighboring towns and regions, creating vast areas where buying one’s own home is becoming increasingly less affordable. This is the case despite the fact that residents of large metropolitan areas generally earn higher incomes than those living outside them.
The situation is particularly difficult in the capital regions of nearly all the countries surveyed. Most of them fall into the category of lowest housing affordability. A person with an average income in a given region, allocating one-third of their earnings to repay a 30-year mortgage, could afford to purchase a home with an area of less than 50 m².
Affordability of apartments for sale in European local administrative units. The map shows the apartment size (in m²) that can be afforded by allocating one-third of the average equivalent income toward a 30-year mortgage in 2024.
The study also reveals clear differences between Central and Eastern Europe and Western Europe. In post-socialist countries, apartment prices have converged with the European average to a much greater extent than the incomes of their residents. As a result, housing has become particularly inaccessible there for people who would like to buy an apartment with their own earnings.
A good example is Poland, which stands out on the maps as having very low housing affordability; however, it should be emphasized that in our country, a very large portion of the population already owns an apartment or house and is not paying off a mortgage, whereas the situation is entirely different for young adults, people starting families, and those who want or need to move. It is precisely these groups who are grappling with current real estate prices and the costs of loans. For many of them, buying their own home can be very difficult, even if they earn an average income.
Compared to Central and Eastern Europe, the Scandinavian and Baltic countries fare better, as housing is generally more affordable there. However, even in those regions, there are cities and areas where buying property is significantly more difficult than in other parts of the country.
Popular tourist regions constitute a separate category. The maps clearly show that housing on the coasts of France and Spain, as well as in Portugal, Greece, and Croatia, is significantly less affordable than in the more rural areas of those same countries. A similar situation exists in the Alps. This illustrates just how significant tourism-related demand can be for local housing markets.
High housing prices do not stop at national borders either. This is evident, for example, in the areas surrounding Switzerland and Luxembourg, where regions with low housing affordability extend into neighboring countries as well.
Renting an apartment isn’t always easier than buying one
In most of Central Europe, renting an apartment seems slightly more affordable than buying one. However, the situation is different in Ireland, Portugal, and Italy, where one-third of the average income can rent a smaller living space than what a budget allocated for mortgage payments would allow one to purchase.
Affordability of rental housing in European local administrative units. The map shows the living space (in m²) that can be afforded by allocating one-third of the average equivalent income to rent in 2024.
Regardless of these differences, the rental market exhibits similar patterns to those in the sales market. It is most difficult to find affordable housing in large cities and popular coastal and mountainous regions.
Buying and renting should not be compared solely on the basis of the number of square meters available for the same amount of money. By paying off a mortgage, the owner gradually reduces their debt and increases the value of their assets. In the case of renting, the rent paid does not lead to the acquisition of the apartment. Differences also exist regarding the stability of the housing situation. Ownership and renting provide different rights and levels of housing security, even in countries where the rental market is subject to detailed regulations. The private rental market was significantly more difficult to study compared to the option of purchasing real estate. In some regions, particularly rural ones, there are few apartments available for rent, or listings do not appear on publicly accessible real estate websites.
How many Europeans live in regions where it is difficult to own a home?
Maps alone do not yet reveal the full scale of the housing crisis. Large cities occupy a relatively small area compared to vast rural areas. Looking solely at the map, one might therefore get the impression that the problem of high housing prices affects only a limited part of Europe.
A huge number of people live in these relatively small areas. That’s why the researchers decided to take into account not only housing prices and local incomes but also the population of each region. They divided the areas under study into categories: cities, smaller towns and suburbs, and rural areas. They then examined what proportion of the European population lives in regions with a specific level of housing affordability.
Nearly 44% of residents in the studied areas of Europe live in regions where, on an average income, one can purchase a home with an area of less than 50 m², allocating one-third of their earnings toward repaying a 30-year mortgage. Another 28% of residents live in regions where, under the same conditions, they can purchase an apartment ranging from 50 to 75 m². Only 5% live in areas classified as having the highest housing affordability.
Similar patterns are evident in the rental market. More than 39% of residents in the surveyed regions of Europe live in areas where spending one-third of their average income on rent allows them to rent an apartment smaller than 50 m².
The problem is particularly evident in large cities. Of all people living in regions with the lowest rental affordability, over 65% are city dwellers. About 26% live in smaller cities and suburbs, and about 10% in rural areas. In turn, about 22% of the total population lives in regions where one-third of the average income is sufficient to rent an apartment ranging from 50 to 75 m².
In rural areas, the situation is more varied. Residents of these areas are relatively evenly distributed across the various categories of rental affordability. However, they face a different problem: a lack of apartments available for rent.
As many as 12% of rural residents live in places for which researchers were unable to find any formal rental listings. This does not necessarily mean there is a complete lack of apartments available for rent. Properties may be made available through friends, family, or other informal channels not covered by the online listings analyzed in the study.
It is worth noting that the data presented does not indicate how much current residents of specific regions pay for their housing. Rather, it shows the costs a person would face if they were looking to buy or rent a home there at current market prices.
In summary
More than 70% of residents in the surveyed areas of Europe live in regions where a person earning an average income, who allocates one-third of their earnings toward repaying a 30-year mortgage, can afford to buy an apartment with an area not exceeding 75 m². The researchers list Portugal, the Netherlands, Switzerland, Poland, and Hungary, among others, as countries where buying an apartment is particularly difficult for first-time buyers.
As in any study, the authors emphasize that their analysis also has limitations. The maps they created are based primarily on prices listed in real estate advertisements, which do not always correspond to the amounts actually paid by buyers and renters.
