House Price-to-Income Ratio in the EU by Country

Key Takeaways

• Portugal recorded the EU’s largest rise in the house price-to-income ratio since 2015. A shortage of new homes and more buyers from abroad pushed Portuguese house prices up much faster than incomes.
• Romania’s house price-to-income ratio fell 44% since 2015 because incomes grew much faster than house prices. Buying a home now takes a smaller share of what Romanians earn.
• The EU-wide house price-to-income ratio rose 5.7% between 2015 and 2024. Too little homebuilding across the EU is pushing house prices up faster than incomes.

Change in House Price-to-Income Ratios Across EU Countries

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The house price-to-income ratio shows how expensive homes are compared with what people earn. When house prices rise faster than incomes, the ratio goes up. Homes then become harder to afford. The table compares each country’s 2024 house price-to-income ratio with that country’s own 2015 level. It does not show which country is cheapest today.

The EU-wide house price-to-income ratio reached 105.72 in 2024. That means homes in the EU cost 5.7% more compared with income than in 2015.

EU House Price-to-Income Ratios Rose Most in Portugal and the Netherlands

Portugal recorded the largest rise in the house price-to-income ratio among the 27 EU countries. Its house price-to-income ratio rose from 100 in 2015 to 144.34 in 2024. That means homes in Portugal cost 44% more compared with income than in 2015.

A shortage of new homes drove much of Portugal’s rise in the house price-to-income ratio. Four problems held back homebuilding in Portugal:

• Fewer construction companies since the 2008 financial crisis
• Higher building costs caused by too few skilled workers
• Long waits for building permits
• Planning rules that limit land for new homes

On top of that, more people from outside Portugal started buying homes. To boost its economy, Portugal offered tax breaks and residence permits to foreign investors, pensioners and skilled workers.

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Foreign buyers made up about 10% of the value of all home sales in Portugal between 2019 and 2024. More buyers competing for a limited number of homes pushed Portuguese house prices up faster than incomes.

The Netherlands recorded the second-largest rise in the house price-to-income ratio in the EU. The Dutch house price-to-income ratio rose 29% to reach 129.33 in 2024.

Like Portugal, the Netherlands completed few new homes despite a large housing shortage. Four problems slowed homebuilding in the Netherlands:

• Higher interest rates
• Rising construction costs
• Too few skilled workers
• Strict rules on nitrogen pollution

Nitrogen pollution from farming, traffic and industry harms protected nature areas. In 2019, a top Dutch court ruled that the country’s nitrogen rules broke EU law. That ruling put many permits for new homes on hold.

At the same time, Dutch tax benefits made buying a home more attractive than renting. Special loans let first-time buyers borrow extra money.

With these tax benefits and loans, buyers could pay more, but there were still too few homes. As a result, Dutch house prices rose faster than incomes.

Fast Income Growth Gave Romania the EU’s Largest Fall in House Price-to-Income Ratio

Romania shows the opposite pattern to Portugal. Romania recorded the largest fall in the house price-to-income ratio among the 27 EU countries.

Romanian house prices still rose between 2015 and 2024. But Romanian incomes rose much faster than house prices. 

Three things helped push Romanian wages up:

• Big increases in the minimum wage
• A shortage of workers
• Strong economic growth

Because incomes grew faster, Romania’s house price-to-income ratio dropped from 100 in 2015 to 55.88 in 2024. A home in Romania now costs 44.12% less compared with income than in 2015.

Across the EU, the house price-to-income ratio depends on two things: how many new homes get built and how fast incomes grow. When strict building rules, worker shortages, and high land prices slow down homebuilding, house prices rise faster than incomes. When incomes grow fast enough, homes can become easier to afford even as prices rise.