Housing costs across the European Union continued their upward trajectory in the first quarter of 2026, with house prices rising 5.1% and rents 3.0% compared with the same period a year earlier, according to data released by Eurostat. Both measures exceeded the EU's average inflation rate of 2.3%, though the scale of increases varied dramatically from one member state to another.
In 2025, households across the bloc spent an average of 18.9% of their disposable income on housing, a figure that exceeded 30% in several countries. The latest quarterly data, covering 28 European states (all EU members except Greece, plus Norway and Iceland), shows that only Finland recorded a decline in house prices, with a 2% drop. Every other market posted gains.
Southern Europe and the Balkans Lead the Pack
Portugal recorded the steepest annual house price increase at 17.8%, followed closely by Bulgaria (14.8%), Slovakia (14.4%), and Croatia (14.3%). Spain, the fifth-ranked country, saw prices rise 12.8%, making it the fastest-growing major EU economy for housing costs. Among other large economies, Italy posted a 5.2% increase, just above the EU average, while Germany recorded a modest 1.4% rise and France barely moved at 0.1%.
Double-digit growth was also observed in Lithuania (11.9%), Hungary (11.2%), Latvia (10.9%), and Czechia (10.1%). In the Nordic region, Denmark's 8.3% increase exceeded the EU average by more than three percentage points, while Norway (4.6%), Iceland (2.8%), and Sweden (2.6%) remained below it.
In the top five countries—Portugal, Bulgaria, Slovakia, Croatia, and Spain—house price gains outpaced overall inflation by roughly ten percentage points. Romania, which had the highest inflation in the EU at 8.6%, saw house prices rise only 7.8%, meaning real housing costs actually fell there.
Croatia's Rent Explosion
Rents across the EU rose 3.0% year-on-year, a significantly slower pace than house prices. However, Croatia was a dramatic outlier: rents there surged 39.1% over the period. Mikk Kalmet, a real estate expert at Global Property, attributed this to the country's growing appeal as both a short- and long-term rental destination, particularly compared with more established markets such as Spain and southern France.
Bulgaria was the only other country with double-digit rent growth (10.5%), followed by Iceland (8.4%), Romania (8.4%), and Greece (8.1%). Among the EU's four largest economies, Italy (3.8%) was above the EU average, while Spain (2.5%), Germany (2.2%), and France (1.9%) were below. Rents rose by more than 5% in Latvia (6.7%), Czechia (6.2%), Slovakia (5.7%), and Portugal (5.1%).
Even over shorter timeframes, the increases were notable. Compared with the fourth quarter of 2025, EU house prices rose 1.2% and rents 0.7% in the first quarter of 2026. Relative to the 2025 annual average, house prices were up 2.9% and rents 1.8%. In Croatia, rents jumped nearly 25% when measured against the 2025 annual average.
The persistent gap between housing cost growth and general inflation underscores a broader affordability challenge across the continent. As Spain's migrant regularisation draws nearly 1.2 million applications, demographic pressures may further strain housing markets in popular destinations. Meanwhile, the EU faces a steep challenge to refill gas storage, adding to household cost-of-living concerns. In Germany, households are turning to battery storage to manage energy price volatility, a trend that may also influence housing investment decisions.
