Since the beginning of 2010, the cost of housing in European countries has increased by 70% on average. However, there are also countries where real estate prices have remained virtually unchanged during this time. Find out more about how housing prices and rental rates have changed over the past ten years

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Housing prices in Europe have increased by 70% on average over the past 10 years, according to Eurostat. During this time, only Italy, Greece, and Cyprus did not see a significant increase in housing prices. 

RBC-Ukraine analyzed how real estate prices and rental rates have changed from 2010 to the second quarter of 2023.

Changes in rental prices in Europe over 13 years: details

Over the past few years, real estate prices, both for rent and for sale, have increased significantly in Europe. There are countries of the European Union where, according to Eurostat, the cost of housing has more than doubled. Among them:

• Estonia (+211%);

• Hungary (+180%);

• Lithuania (+152%);

• Latvia (+144%);

• Czech Republic (+122%);

• Luxembourg and Austria (both +120%).

There are only a few countries where prices have not experienced significant growth over the past 13 years. During this period, apartment prices actually fell in Greece, which was struggling with the crisis in 2010 (-14%), Italy (-8%) and Cyprus (-3%).

Why is housing getting cheaper in Southern Europe?

Many may be surprised that rental prices are not rising in Southern European countries popular with tourists and expats. Many people dream of buying or renting a home here for vacation, at least for the warm season. In Greece, Italy and Cyprus, the cost of housing has not only not increased, but even decreased.

The decline in prices in Italy and Greece is largely due to rising energy costs and the presence of many old houses without repair, which are not always attractive due to high utility costs and poor housing condition.

"Many houses in small Italian towns and villages are old and have not been renovated for a long time. They are large consumers of energy and often have other household problems. Household incomes in Greece have declined, and, like in other southern countries, COVID-19 has led to a reduction in rental income," comments Kazimierz Kirejczyk, JLL's housing strategy expert.

At the same time, the fall in prices in Cyprus is a little harder to explain. The real estate market in this country suffered significantly during the global financial crisis of 2008 and continued to decline until 2014.

"Russians remained the main group of foreign investors who bought property in Cyprus, possibly in the hope of obtaining a 'golden visa'. The Cypriot market is lively and the recent decline in the price index probably reflects a change: a reduction in the number of very expensive properties in favor of more middle-class housing," explains Kazimierz Kirejczyk.

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Buying or renting a home in Europe: which is better?

According to Eurostat, prices for housing for sale in the EU have increased more than rental prices. This applies to 20 of the 27 countries of the European Union. For example, in Poland, rental prices have increased by almost 75% since 2010.

Rental prices have increased in 26 EU countries. The largest price increases were recorded in Estonia (+208%) and Lithuania (+168%). However, rental prices in Greece fell by 21%.

Today, apartment rental prices are declining in many countries. Even so, the overall price trend shows an increase in housing prices in the EU by 0.3% in the second quarter of 2023 compared to the first quarter of 2023.

The largest decline in rental prices was recorded in the following countries:

• Germany (-9.9%);

• Denmark (-7.6%);

• Sweden (-6.8%).

The largest increase in rental prices was recorded in Croatia (+13.7%), Bulgaria (+10.7%) and Lithuania (+9.4%).

Other studies have also recorded a rise in rental housing prices. Statista.com analyzed 64,004 housing units in 23 European cities, which are rented mainly to young people. More than 95.8% of the housing was available with all the necessary furniture, and 58% included the cost of utilities.

It turned out that the cost of renting apartments in Lisbon and Porto increased by 25% from April to June 2023 compared to the same period a year earlier. This is an alarming figure, especially given that local wages (which were already low compared to other European countries) are not growing at the same rate as rental prices, according to Statista.

During the same period, in the Hungarian capital, Budapest, the average apartment price rose by a staggering 43% year-on-year to €1,100.

Meanwhile, in the Italian cities of Florence and Turin, which historically had significantly lower rental prices compared to other parts of the country, are now catching up with their counterparts. Florence has seen a 21% increase in rental prices (average price of 1,700 euros), while in Turin, housing prices have risen by 12.5% (900 euros), according to analysts.

"This has several reasons. Firstly, there is a worsening housing shortage in Europe, which sharply increases the cost of renting apartments in many cities on the continent. But at the same time, the new trend of the COVID era is working from home, which means that many young skilled workers are moving abroad, which also affects prices," the publication says.

The largest rental price increases were recorded in the following cities:

• Budapest (42.9%);

• Hague (27.8%);

• Utrecht (25.8%);

• Porto (25%);

• Lisbon (15.8%).

We remind you! Apartment renters in Europe are facing an acute shortage of supply on the market, while prices for existing housing have risen to record highs. Find out where housing prices are currently rising the most and how much it costs to rent an apartment in a big city. 

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