When people think about their monthly expenses, housing is usually at the top of the list. Whether you are paying rent, covering your mortgage, or keeping up with utility bills, the cost of simply having a roof over your head can take up a large portion of your income. In Europe, this issue has become even more pressing as housing prices, rent, and energy costs continue to rise year after year.
According to Eurostat, housing—including utilities and other related expenses—represents the largest single expenditure for European households. Over the past two decades, its share of household spending has steadily increased, making it a defining factor in financial well-being. On average, Europeans spend about 20% of their disposable income on housing, but this number varies dramatically depending on where you live.
So, how much of your income goes to housing and bills compared to others in your country—or even across Europe? Let’s break it down.
What Counts as Housing Costs?
Before comparing numbers, it’s important to clarify what “housing costs” really include. Eurostat defines housing costs as all the monthly expenses connected to living in your home. This covers a wide range of items such as:
- Rent payments for tenants
- Mortgage interest payments for homeowners
- Utility bills like water, electricity, gas, and heating
- Structural insurance and mandatory service charges
- Routine maintenance and repairs
- Property taxes and other housing-related levies
In other words, housing costs go beyond just paying rent or your mortgage. They also account for the essential services and upkeep that make your home livable.
Disposable income, on the other hand, includes everything you earn after taxes: salaries, income from self-employment, pensions, social transfers, and even income from investments or property. That’s why comparing housing costs against disposable income gives a more accurate picture of affordability.
The European Average: 19.7% of Income on Housing
In 2023, the average household in the European Union spent 19.7% of its disposable income on housing costs. While that figure may sound manageable, the range across countries tells a very different story.
At the lower end, households in Cyprus only spent 11.6% of their disposable income on housing. At the opposite extreme, households in Greece spent a staggering 35.2%—more than a third of their income.
Between these two extremes lies a complex landscape shaped by national economies, local housing markets, and government policies.
Why Greece Tops the List
Greece’s situation stands out not only within Europe but also globally. Spending over one-third of disposable income on housing makes Greece a clear outlier.
The Impact of the Financial Crisis
According to Ilias Nikolaidis, content director at the Athens-based think tank diaNEOsis, the roots of Greece’s housing cost problem can be traced back to the economic crisis between 2009 and 2014. During that period, Greek households lost about 40% of their income. While incomes plummeted, the demand for housing did not.
Rising Demand, Limited Supply
Several factors pushed housing prices up despite stagnant wages:
- Foreign demand fueled by Greece’s “Golden Visa” program, which attracted wealthy investors.
- Tourism growth driving the popularity of short-term rentals on platforms like Airbnb.
- Slowed construction, leading to limited new housing supply entering the market.
Together, these pressures created a housing market where costs soared while household income remained weak, leaving Greek families spending a disproportionate share of their income on housing.
How Other Countries Compare
Northern and Western Europe: Higher Costs
Outside of Greece, some of the highest housing cost burdens are found in wealthy Northern and Western European countries.
- Denmark: 25.9%
- Germany: 25.2%
- Norway: 25%
- Switzerland: 25.2%
Germany is particularly notable because it far exceeds the other members of the EU’s “Big Four” economies in terms of housing costs.
The EU’s Big Four: A Sharp Divide
- Germany: 25.2%
- France: 17.9%
- Spain: 17.2%
- Italy: 14.5%
Germany clearly shoulders the heaviest burden, while southern European countries like Spain and Italy have relatively lighter housing cost ratios.
Nordic Countries: A Common Challenge
Three Nordic countries—Denmark, Norway, and Sweden—all rank among the top six most expensive places in terms of housing’s share of income. In Sweden, households spend about 24%, while Finland is closer to the EU average at 19.3%.
More Affordable Countries
At the more affordable end of the spectrum, several countries spend less than 15% of disposable income on housing:
- Malta: 12%
- Slovenia: 13.8%
- Portugal: 14%
- Croatia: 14.4%
- Italy: 14.5%
These countries often benefit from lower rents, cheaper construction costs, or stronger policies supporting affordable housing.
The Hidden Divide: Income Levels and Housing Stress
It’s not just geography that matters—income inequality plays a major role in housing affordability.
For households with incomes below 60% of the national median (considered “at risk of poverty”), housing costs eat up a shocking 38.2% of disposable income on average across the EU.
Extreme Cases
- Greece: 62.4% of income goes to housing for people at risk of poverty.
- Denmark: 57%
- Norway: 48.5%
- Sweden: 48.1%
- Germany: 45.8%
- Switzerland: 45.5%
This means that low-income households in these countries spend nearly half—or in Greece’s case, almost two-thirds—of their income just keeping a roof over their heads.
By contrast, higher-income households (those above 60% of median income) spend only about 16.2% of their disposable income on housing.
Trends Over Time: Housing Costs Keep Rising
Eurostat’s data shows a clear trend: housing costs as a share of disposable income are slowly but steadily rising across Europe. Between 2020 and 2023, the EU average increased by 1.2 percentage points.
In some countries, the increase has been dramatic:
- Hungary: +5.7 pp
- Norway: +5 pp
- Estonia: +4 pp
- Luxembourg: +3.8 pp
- Germany: +3.7 pp
- Turkey: +3 pp
- Malta: +3 pp
Only a few countries, like Bulgaria, saw housing costs decrease (–2 pp).
This steady rise suggests that affordability will remain a growing challenge unless policies are introduced to manage housing demand, supply, and financing.
Why Housing Costs Vary So Much
Several factors explain why housing costs take up more income in some countries than others:
- Mortgage Access and Conditions: Easier access to affordable mortgages can reduce housing cost burdens.
- Rental Market Regulations: Strong rent control laws help limit rental costs for tenants.
- Construction Trends: Countries with more active housing construction tend to have lower housing burdens, as supply better meets demand.
- Economic Inequality: Nations with larger income gaps often see lower-income households squeezed hardest by housing expenses.
- Government Support: Subsidies, social housing, and tax incentives can all reduce the relative cost of housing.
Is Measuring Housing Costs by Income Enough?
Some experts argue that measuring housing costs as a share of disposable income is not the best way to assess affordability.
Dara Turnbull, research coordinator at Housing Europe, notes that these indicators may not fully capture the “gravity of the situation.” For example, two households spending 25% of their income on housing may face very different levels of hardship depending on their remaining income, local cost of living, and access to services.
This suggests that while percentages are useful for comparison, they may not always reflect the lived reality of families struggling with rent, mortgages, or utility bills.
Final Thoughts: What This Means for European Households
The data makes one thing clear: housing is becoming more expensive relative to income across most of Europe. Whether you’re in Germany facing rising rents, in Greece struggling with post-crisis affordability, or in Denmark managing high utility bills, housing remains the single largest financial burden for most households.
For families at risk of poverty, the situation is particularly severe, with some spending nearly two-thirds of their income on housing alone. At the same time, wealthier households enjoy more breathing room, spending far less proportionally.
As housing costs rise faster than incomes in many countries, affordability will remain a central issue for policymakers, economists, and everyday citizens alike.
If you’re planning to live, study, or work in Europe, it’s essential to understand not just the average housing cost in your country but also how it compares to your income. For many Europeans, the dream of affordable living depends not just on location but also on policies that ensure housing remains accessible for all.
