• Rents went up by 16% in the European Union, house prices by 34% since 2010.
  • House prices more than doubled in Estonia, Luxembourg and Hungary during this period.
  • More than two-thirds of the EU population own their home.
  • 90% of cities around the world do not provide affordable or adequate quality housing, according to the World Economic Forum.

House price growth is outpacing increases in rents in the European Union, according to statistics agency Eurostat.

During the period 2010 to 2021, house prices gained 34%, while rents increased just 16%, the data showed. On a country-by-country basis, house prices increased more than rents in 18 of 27 EU member states.

House price growth has outpaced rental increases since 2010.
Graph showing house prices compared to rent in the EU since 2010.
Image: Eurostat

House prices rose in 23 EU countries and decreased in four, with the biggest increases in Estonia, where they climbed133%, Luxembourg, where they grew 111% and Hungary, where they jumped 109%.

Declines were seen in Greece, where house prices dropped 28%, Italy, where they sank 13% and in Cyprus and Spain, where they fell 8% and 3%, respectively.

Estonia’s house prices have soared since 2010.
Graph showing house prices compared to rent in EU countries.

The divergence between house prices and rents took off in early 2015, when house prices started to increase at a much faster pace than rents.

Estonia also saw the highest increase in rents, with prices rising 142%. Lithuania was second, with a 109% jump in rents, while Ireland was third with a rise of 66%. Decreases were recorded in Greece, where they fell by a quarter, and Cyprus, with a drop of 3%.

Home ownership varies

While there are differences in the rates of change of house prices and rents across the EU, there are also differences in home ownership.

In the EU as a whole in 2019, 70% of the population lived in a house they owned, while the remaining 30% lived in rented housing.

Owning is more common than renting in all EU member states, however in Germany, renting is almost on par, with 49% of the population being tenants.

The highest shares of home ownership are in Romania, where 96% of the population own their home, followed by Hungary and Slovakia – both at more than 90%.

70% of the EU population owns the house they live in.
Percentage of the population in EU countries which own or rent a house.
Image: Eurostat

Wage growth not keeping pace

High rates of house price inflation mean that in some member states, wage growth can struggle to keep pace, putting the prospect of ownership further from reach.

In the five years leading up to the COVID-19 pandemic, real wage growth fluctuated between 0.7% and 2.1% in the EU, according to the International Labour Organization. Initial estimates for 2020, when the pandemic took grip, show a drop in real wages.

Annual average real wage growth global and EU-27, 2006-20 (percentage)
Real wages growth has been muted across the EU.
Image: ILO

World Economic Forum research shows that around 90% of cities around the world do not provide affordable or adequate quality housing. And since cities around the world are growing at an unprecedented rate, this raises a challenge for policymakers to help provide good, affordable housing.

What is the World Economic Forum doing to improve the future of cities?

Cities represent humanity’s greatest achievements – and greatest challenges. From inequality to air pollution, poorly designed cities are feeling the strain as 68% of the world’s population is predicted to live in urban areas by 2050.

The World Economic Forum’s Platform for Shaping the Future of Urban Transformation supports a number of projects designed to make cities cleaner and more inclusive, and to improve citizens’ quality of life:

  • Creating a net zero carbon future for cities
    The Forum’s Net Zero Carbon Cities programme brings together businesses from 10 sectors, with city, regional and national government leaders who are implementing a toolbox of solutions to accelerate progress towards a net-zero future.
  • Helping citizens stay healthy
    The Forum is working with cities around the world to create innovative urban partnerships, to help residents find a renewed focus on their physical and mental health.
  • Developing smart city governance
    Cities, local governments, companies, start-ups, research institutions and non-profit organizations are testing and implementing global norms and policy standards to ensure that data is used safely and ethically.
  • Closing the global infrastructure investment gap
    Development banks, governments and businesses are finding new ways to work together to mobilize private sector capital for infrastructure financing.

Contact us for more information on how to get involved.

“Well-functioning property markets can act as a financial springboard for enterprises and job creation,” the Forum Insight Report said. “The challenge of affordability requires not just short-term fixes but also long-term strategies. Solutions will need to address both the supply side and the demand side of the housing market, and involve public-sector, private-sector and non-profit stakeholders.”