New Data Reveals Varying Housing Costs Across Europe

Discover where individuals in Europe are willing to spend more on accommodation, with Finns allocating the highest percentage of their total expenditure towards housing.

New data has revealed the varying costs of housing across Europe, shedding light on where people are willing to spend more on accommodation. According to the Resolution Foundation, individuals in Finland allocate the highest percentage of their total expenditure towards housing, closely followed by the British. The data, which combines actual rent payments with an estimate of the cost of housing owners would incur if they were to rent their property on the open market, highlights that Finns spend 24% of their total expenditure on housing - significantly higher than the EU average of 15%.

In contrast, housing in Poland stands out as having the lowest share of spending among OECD countries, accounting for only 6% of expenditure. When examining the price of housing relative to overall price levels, the UK emerges as the country with the highest housing costs in Europe, followed by New Zealand, Australia, and Ireland. On the other end of the spectrum, Poland and Greece rank below the OECD average, with the affordability of housing partially explaining the high levels of housing consumption in these countries.

Turkey has experienced the most significant increase in house prices in Europe, with prices soaring to 12 times their nominal value over the past nine years. This surge has put Istanbul in direct competition with notoriously expensive cities like Paris and London. In comparison, northern European countries such as Sweden and Finland have seen more modest increases in nominal housing prices since 2015. Hungary closely follows Turkey, with a 166% increase in house prices over the same period.

The escalating prices of housing and rents, driven by growing demand from foreign buyers and sustained economic growth, are posing challenges for Greeks looking to enter or move up the property ladder. The Resolution Foundation also analyzed the relationship between a nation's overall prosperity and its housing consumption, revealing that Poland, Greece, and the Czech Republic lead in housing consumption relative to prosperity. In contrast, households in the UK consume significantly less housing compared to their overall prosperity, ranking lower than all other OECD economies except for Colombia.

The data on housing costs in Europe highlights the disparities in expenditure and affordability across different countries, with implications for individuals' access to housing and property markets.