Rents across European Union rose in 2025 as demand for housing continued to outpace supply, placing growing pressure on households and pushing affordability to the forefront of economic concerns.

Data from Eurostat shows that average rents in the EU increased by 3.1 percent over the year. While this marks moderate growth overall, several countries recorded far sharper rises, with double-digit increases reported in parts of Eastern and Southern Europe.

Housing costs already account for around one-fifth of the average household’s income across the EU, though the burden is significantly higher in some countries. In Greece, for example, housing expenses can reach as much as 35 percent of household income.

Analysts say the main driver behind rising rents is a widening imbalance between demand and supply. Higher mortgage rates and rising property prices have made home ownership less accessible, pushing more people into the rental market. This trend has been particularly evident among first-time buyers, who are increasingly unable to afford purchases.

At the same time, supply constraints have intensified. Changes to tax policies and regulations in several countries have reduced incentives for landlords, while higher costs linked to energy efficiency upgrades and property maintenance have added further pressure. These factors have contributed to tighter rental markets and sustained upward pressure on prices.

Among EU countries, Croatia recorded one of the highest increases, with rents rising by 17.6 percent. Other countries with notable growth include Hungary, Bulgaria and Romania, all of which saw rent inflation close to or above 8 percent.

In contrast, several major economies experienced more moderate increases. Rent growth remained below the EU average in Germany, France and Spain, while Italy recorded a slightly higher rise of 3.8 percent.

When non-EU countries are included, Turkey stands out as a clear outlier. Rents there surged by nearly 78 percent, far exceeding other markets. Economists attribute this to a combination of high inflation, rising property prices and limited access to affordable mortgage financing, which has pushed a large share of the population into renting.

Government intervention in Turkey has also had mixed effects. A cap on rent increases introduced in 2022, and extended through 2024, limited rises for existing tenants but led landlords to raise prices sharply for new leases in an effort to recover losses.

Across Europe, rising costs for landlords have also played a role. Property owners facing higher borrowing costs and maintenance expenses have increasingly passed these on to tenants, adding to overall rent inflation.

The data highlights a growing divide across the region, with Eastern Europe and the Balkans seeing faster increases than more established Western markets. As affordability pressures continue to build, housing is expected to remain a central economic and political issue in the coming years.