House prices and rents: Where did they rise most in early 2026?

European Housing Markets Show Strong Growth in First Quarter of 2026

House prices and rents - The European housing sector experienced continued upward momentum during the opening months of 2026, with both property values and rental costs climbing across most member states. This expansion follows a pattern established in 2025, when European households allocated nearly one-fifth—specifically 18.9%—of their disposable earnings toward housing expenses. Certain nations witnessed even more pronounced financial commitments, with housing costs surpassing the 30% threshold in several locations.

Property Values Outpace Inflation

According to Eurostat data, EU house prices climbed by 5.1% during the first quarter of 2026 when measured against the same period the previous year. Rental rates simultaneously increased by 3.0%. Both metrics exceeded the broader EU inflation rate of 2.3%, though regional variations proved substantial. The analysis encompassed 28 European nations, incorporating all EU members excluding Greece alongside Norway and Iceland.

Property values demonstrated growth in every surveyed country except Finland, which experienced a 2% decline between the first quarters of 2025 and 2026. Portugal led the continent with an extraordinary 17.8% surge in house prices. Bulgaria followed at 14.8%, Slovakia reached 14.4%, and Croatia achieved 14.3%. Among the European Union's most significant economies, Spain posted the strongest performance at 12.8%, securing fifth place overall.

France recorded the most modest appreciation at just 0.1%, ranking second only to Finland's contraction. Italy's 5.2% increase placed it slightly above the continental average, while Germany's 1.4% gain represented only a marginal improvement over France's figures. Double-digit growth also materialized in Lithuania (11.9%), Hungary (11.2%), Latvia (10.9%), and Czechia (10.1%).

Rental Markets Show Diverse Patterns

Rental increases across the EU totaled 3% between the first quarters of 2025 and 2026, considerably lower than the 5.1% property value appreciation. All 30 nations in the dataset—including EU members, Norway, Iceland, and Switzerland—experienced rising rents, though Finland and Slovenia each registered minimal 0.1% gains.

Croatia emerged as a remarkable outlier in the rental sector, with costs jumping 39.1% over the measured period. Mikk Kalmet, a real estate specialist at Global Property, explained this phenomenon: "Rents in Croatia were showing strong growth, mainly because the country is an attractive short- and long-term rental destination, especially compared with more established markets such as Spain and the south of France."

Bulgaria stood alone among other nations with double-digit rental growth at 10.5%. Iceland followed at 8.4%, Romania matched that figure at 8.4%, and Greece reached 8.1%. Within the EU's four largest economies, Italy's 3.8% rental increase surpassed the continental average, whereas Spain (2.5%), Germany (2.2%), and France (1.9%) all fell below it.

Regional Comparisons and Inflation Context

Several countries demonstrated rental increases exceeding 5%, including Latvia (6.7%), Czechia (6.2%), Slovakia (5.7%), and Portugal (5.1%). When examining inflation relationships, Romania experienced the highest rate at 8.6%, followed by Iceland at 4.7% and Croatia at 4.1%.

In Romania and Iceland, property value growth lagged behind inflation, creating notable exceptions to the broader trend. Conversely, the five nations leading in house price appreciation—Portugal, Bulgaria, Slovakia, Croatia, and Spain—all experienced increases approximately 10 percentage points above their respective inflation rates.

Short-Term Trends and Supply Constraints

Recent quarterly comparisons reveal continued momentum. Against the fourth quarter of 2025, EU house prices grew 1.2% while rents increased 0.7% during the first quarter of 2026. When measured against the 2025 annual average, EU house prices rose 2.9% and rents climbed 1.8% in the opening quarter of 2026. Croatia's rental market showed particular strength, with costs approaching 25% growth compared to the 2025 annual baseline.

Addressing the underlying drivers of these trends, Kalmet noted in late 2025 that elevated construction expenses and insufficient new housing supply continued constraining availability. Meanwhile, robust demand kept exerting upward pressure on prices across the continent.