Nearly 19 years of income to buy a home? Europe’s least affordable housing markets
Nearly 19 Years of Income to Buy a Home: Europe's Most Unaffordable Markets
Nearly 19 years of income to buy - For many Europeans, purchasing a home has become a distant dream, with some cities requiring nearly 19 years of income to afford an average property. Lisbon, the Portuguese capital, tops the list, where the price-to-income ratio has surged to 18.7, meaning it would take nearly 19 years of income to buy a home. This stark figure is mirrored in Split, Croatia, making these cities the most unaffordable in Europe. The disparity underscores a growing challenge: how long would it take for an average family to save enough for a home in such places?
The Price-to-Income Ratio: A Measure of Housing Affordability
The price-to-income ratio serves as a critical benchmark for assessing affordability. It calculates how many years of income are needed to purchase a standard property, comparing market prices to household earnings. A ratio exceeding 10 is often a warning sign, as it indicates housing costs are straining budgets. According to Mike Langen, a senior housing economist at ABN AMRO, this threshold aligns with typical mortgage lending practices that cap housing expenses at 30% of income and limit loan terms to 30 years.
When the ratio surpasses 18.7, as seen in Lisbon and Split, the situation becomes even more dire. These cities now demand nearly double the time typically required to buy a home, pushing the dream further out of reach. Following them in the affordability rankings are Prague, Milan, and Tirana, with ratios of 18.1, and Vienna, Belgrade, Paris, London, and Brno, which range from 17.4 to 15.8. This trend highlights a broader issue: in major European cities, home ownership is increasingly a privilege rather than a right.
Portugal's Housing Crisis: A National Challenge
Portugal faces a severe housing affordability crisis, with its price-to-income ratio in Lisbon reaching an alarming 18.7. This means it would take nearly 19 years of income to purchase an average home, far exceeding the national average. Over the past decade, property values have skyrocketed by nearly 240%, while wages have only risen by approximately 59%, according to Global Property Guide data. This sharp divergence has left many households struggling, especially in Lisbon, where the ratio of nearly 19 years of income underscores the difficulty of achieving homeownership.
A modest 50-square-metre apartment in central Lisbon costs around €338,000, with a flat price of €6,763 per square metre. For a household earning an average net salary of €1,416 monthly, this equates to nearly 19 years of income before accounting for other expenses. The cost of living has outpaced income growth, making Lisbon one of the most challenging places for residents to secure a home. This situation has led to a surge in housing protests, demanding policy reforms to address the growing gap between prices and wages.
Broader Structural Issues: Supply, Policy, and Rent Markets
Experts emphasize that the housing crisis in Portugal is not solely driven by rising prices. Insufficient supply, restrictive regulations, and a weak rental market contribute to the problem. The OECD’s 2026 economic survey noted Portugal as one of the developed nations with the least access to housing, citing slow construction responses to demand and policies that limit affordable options. These factors have made it difficult for families to meet housing costs, even with stable incomes.
With nearly 19 years of income required to buy a home, the rental market has become a vital alternative. However, rental prices in Lisbon have also risen sharply, leaving many residents with little choice but to pay exorbitant amounts. The country’s allocation of just 2% of housing stock to social housing, one of the lowest in Europe, exacerbates the issue. Informal settlements on the outskirts of Lisbon have emerged as a result, where families live in substandard conditions despite working full-time.
Historical Context and Long-Term Trends
Recent research indicates that nearly 19 years of income to buy a home is a trend that has been developing over years. The 2015 market bubble, which saw nearly 19 years of income to buy a home in some areas, laid the groundwork for the current crisis. As property values continued to climb, wages stagnated, creating a cycle where affordability worsens. This pattern is not unique to Portugal, as similar challenges are emerging across other European cities with booming economies and limited housing stock.
With nearly 19 years of income to buy a home, the housing market in Lisbon has become a symbol of Europe’s broader affordability issues. The situation reflects a systemic imbalance between supply and demand, driven by factors such as foreign investment, urbanization, and limited policy interventions. As the demand for housing grows, the need for reform becomes urgent to prevent further displacement of residents and ensure long-term affordability.