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EU comparison: Rent or buy - how our neighbours live

As diverse as the people and cultures in the individual countries are, as divergent is the housing situation that emerges from the fog of statistical analysis. In this article we deal with the differences and look at the situation through the eyes of the broker of high quality residential real estate who supports you when you want to sell your property.

- EU comparison: How do Europeans live? Do you prefer home ownership or renting? Different countries - different (living) customs?

What is the ratio of home ownership to rentals? 

According to statistics, the home ownership rate in Germany is just 50 percent compared to other countries:

• Germany: 43.82 %

• Spain: 76.3 %

• Italy: 72.4 %

• France: 65.1 %

• Netherlands: 68.9 %

• Belgium: 72.7 %

• EU-28: 69.3 %

This puts Germany at the lower end of the scale. This leads to the conclusion that half of the population is renting or similar. Why this deviation from the European average?

The historical roots of this development go back to the time of the Second World War. A time which was accompanied by massive destruction of living space.

After the end of the war, masses of rental apartments were therefore built all around the country. The rather dense settlement and the German quality standard in building ("Made in Germany") had enough persuasive power to make people prefer rentals over owning their own home.

An additional aspect is that homeowners are subject to high fees and taxation. Incidental costs make home buying more expensive, state subsidies for home ownership meander between allowances and loans. Property prices also play a role, and thus the construction boom seems to pass “normal earners” by.

Development of rents in Germany in an EU comparison

The heterogeneity in the market for residential rents is high, even within Germany. The asking price per square metre in Hamburg, according to the Engel & Völkers market report, is €11.54; Berlin rents are €11.69/sqm on average for existing properties. And this is still comparably low compared to an equivalent rental apartment in Paris, which according to Eurostat costs about €30/sqm. This, at least, is shown in the following overview of selected European cities:

• Madrid: €18.10

• Rome: €13.40

• Paris (city): €27.80

• Marseille: €11.60

• Rotterdam: €12.40

The average rent level in Germany is (still) relatively low, the dynamics are continuing, with plenty of room in the market for growth. By comparison, property prices are rising by an average of 5% (EU-wide). Purchase price growth has shifted eastwards, amounting to 16.8 % in the Czech Republic and 13.7 % in Hungary, for example. 

Different countries - different (living) customs

Finally, a look beyond our own borders: What preferences do our neighbours have in terms of housing?

• Spain: is the country of real estate owners. They prefer to live in jointly owned properties. The Spanish government already regulated this form of cohabitation in 1960 with the Law on Horizontal Property.

• Italy: The proverbial roof over one's head is expanded in Italy by the guiding concepts of family and kinship. The house (casa) has always occupied a central position. The ownership rate of more than 70% is an indicator of this.

• France: Rental apartments are pricey and sometimes tenants have to pay six months’ rent in advance. Living in France can cost you an arm and a leg, but the French are masters of composure in most instances.

Summary and conclusion

Valuation figures from Eurostat and the European Central Bank suggest that significant upward price adjustments can be expected in Belgium, France, Luxembourg, Sweden and the UK. A good reason in itself to invest in real estate. Whether and how property prices will develop due to the effects of the corona crisis remains to be seen. Our experts are at your service to help you make the right choice. Engel & Völkers shops can be found in many European countries.


Deloitte Property Index 

Engel & Völkers market reports

Eurostat, EU Statistics on Income and Living Conditions, EU-SILC

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