Europe’s housing crisis deepened as soaring prices and rising costs left millions spending over 40 percent of their disposable income on housing, according to Eurostat data.

House prices in the EU rose by 69 percent on average between 2015 and the second quarter of 2026, with some member states seeing prices more than double. Rents and energy costs also climbed, pushing the housing cost overburden rate to 7.7 percent across the EU in 2025. Greece recorded the highest burden at 26.4 percent, followed by Denmark at 14.7 percent, Germany at 11.2 percent, and Sweden at 10.8 percent. Cyprus had the lowest rate at 2.4 percent.

Dr. Hannah Widmer of ETH Zürich attributed the strain to rising housing costs outpacing modest income growth, particularly for lower earners. Dr. Marietta Haffner of TU Delft noted that increasing energy costs could further drive up housing expenses in the coming year.

In Spain, foreign demand for property plummeted as prices hit new highs. Foreign buyers purchased 62,327 homes in the first half of 2026, a 13 percent drop from the same period in 2025, according to Spain’s General Council of Notaries. Non-residents, often buying holiday homes, saw an 18 percent decline in purchases, the lowest in five years. Despite the slowdown, the average price paid by foreign buyers reached a record €2,644 per square metre, up 9.4 percent year-on-year.

The Balearic Islands and the Valencian Community, popular with international buyers, saw foreign purchases fall by 15.4 percent. Yet prices in the Balearics rose 9.3 percent to an average of €5,344 per square metre, while the Valencian Community saw a 15.6 percent price increase to €2,240 per square metre. Moroccan nationals overtook British buyers as the largest group of foreign purchasers in Spain, accounting for 8 percent of transactions.

The European Council acknowledged the crisis, citing rising house prices and housing costs as key drivers. Experts emphasized that the gap between income growth and housing expenses was widening, with energy costs expected to exacerbate the strain.