Rising energy and housing costs are squeezing businesses and households across Europe, with sharp increases in electricity, heating, and rental prices straining budgets from Poland to Spain.
In Poland, energy costs for businesses have surged, with average annual contract prices for 2027 exceeding 550 zł/MWh, up from below 450 zł/MWh in June, according to Ireneusz Sawicki, vice president of Polenergia Obrót. A report by Polenergia and KIG found that in 2025, energy costs exceeded 30% of net financial results for nearly 35% of surveyed industries, with 25 sectors seeing costs surpass 100% of profits. Sawicki attributed the volatility to geopolitical factors, including the blockade of the Strait of Hormuz and rising CO2 emission allowance prices, and advised companies to diversify energy purchases .
Households in Poland are also facing higher heating bills, with heating costs now accounting for nearly half of monthly rent in some cases. Housing cooperatives have begun urging residents to conserve energy, warning that costs could rise further. New regulations set to take effect in January 2027 will introduce minimum heating fees, ensuring that even fully turned-off radiators incur charges of at least 15% of variable heating costs, with a base temperature of 16°C .
In Spain, housing costs are pushing workers into poverty, with 770,000 employees falling below the poverty line after paying rent, according to a study by Oxfam Intermón. The report found that 34% of renters with jobs experience poverty after paying market-rate rent, compared to 10.22% of mortgage holders. Alejandro García-Gil, Oxfam’s employment, housing, and social policy lead, stated that housing is becoming a major driver of inequality, with workers struggling to afford basic needs after covering housing expenses .
In Estonia, district heating prices are rising unevenly, with increases ranging from 1.1% in Tartu to over 30% in Narva, where natural gas remains the sole heating source. Utilitas Eesti reported an 8.5% price hike in Tallinn, citing doubled natural gas costs, higher wood chip prices, and increased energy production expenses. The company hopes to stabilize prices by securing permits for oil shale use and launching a heat pump plant .
The strain is also evident in Denmark, where home sales dropped 12% in September compared to the same month last year, with apartment sales in Copenhagen falling 23%. Brian Friis Helmer, an economist at AL Sydbank, linked the slowdown to rising mortgage rates, now between 4% and 5%, up from 3.5% at the start of 2026, alongside higher costs for gasoline, natural gas, and electricity .
