Is housing expensive in Europe? Price-to-income and price-to-rent, explained

In the second quarter of 2026 Portugal's house price-to-income ratio stood at 144.7, Germany's at 84.7 and Finland's at 75.7. None of those numbers says where homes cost the most euros. Each one is measured against that country's own history, where 100 is the country's own long-term average. This article explains the two ratios behind the housing pages, how to read them, and what they leave out of the question people usually mean when they ask whether housing is expensive in Europe.

Two ratios with the same numerator

Both ratios come from the OECD's house price indicators. Each divides the same thing, a nominal house price index, by something else:

• The price-to-income ratio divides it by nominal disposable income per head. The OECD says it can be considered "a measure of affordability". The income is net household disposable income from the national accounts.
• The price-to-rent ratio divides it by a rent price index. The OECD says it can be considered "a measure of the profitability of house ownership". The rents are consumer price indices for "actual rentals for housing"; where a country lacks one, the OECD uses another indicator, usually the housing CPI aggregate.

Because the house prices are the same in both, a gap between the two ratios in one country comes mostly from the denominators: how incomes and rents have each moved against their own history. The two averages can also cover different periods (Portugal's price-to-income average starts in 1995, its price-to-rent average in 1988).

What "100" means

The OECD publishes each ratio as an index and also in a standardised form, as a percentage of a long-term average (definitions in the OECD Data Explorer); this site shows the standardised form: 100 is the country's own average, 120 is 20% above it, 85 is 15% below it. Three things follow.

• It is a comparison with the country's own past, not with other countries. A reading of 120 in Spain and a reading of 120 in Austria describe two different histories. The ratios rank how far each country sits from its own norm. They do not rank price levels.
• The average covers a different stretch of history in each country. The OECD calculates it over the whole period available, from 1980 where the series is long enough and from its start where it begins later. For Germany that is 1980; for Austria 2000, for Greece 1997 and for Portugal's price-to-income ratio 1995.
• The OECD reads a value above 100 as "an indication of possible housing market pressures". That is the OECD's wording about the ratios. On this page and on the site a figure means one thing only: the distance from the country's own average. It is not a forecast, a verdict on prices or advice.

Fifteen countries side by side

The OECD reports these ratios for 15 countries on this site: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland. The table shows the latest quarter for each: the second quarter of 2026 unless marked. The last column is a different measure, Eurostat's housing cost overburden rate for 2025 unless marked, explained below.

Twelve of the 15 price-to-income ratios and 13 of the 15 price-to-rent ratios are above 100; Italy and Finland are below 100 on both, and Germany is below on income only. Portugal's 144.7 is the highest value in its series, which begins in 1995. Finland's 75.7 is the lowest in its series, which begins in 1975. This site shows no euro-area figure for either ratio: the OECD offers two euro-area aggregates of its own, one covering 17 countries and one whose price-to-rent series ends in the fourth quarter of 2025, two quarters before the country figures.

Why the two ratios can disagree

Germany is the clearest case of the two sitting on different sides of 100: 84.7 against income per head, but 110.7 against rents. In Spain (128.8 and 169.1) and Norway (121.9 and 165.4) both are above 100, but the rent ratio sits far above the income ratio. Since both ratios use the same house prices, the difference lies mostly in what they are divided by. A rent index, like the one that feeds inflation figures, tends to move slowly; the way it behaves is explained in house prices, rents and inflation. Neither ratio is the better one. They answer different questions: how prices compare with what households earn, and how they compare with what renting costs.

Affordability is more than price over income

A ratio of prices to incomes says nothing about the cost of the loan, the size of the home or who has to pay for housing. Eurostat measures one outcome directly with the housing cost overburden rate: the percentage of the population living in households where total housing costs, net of housing allowances, are more than 40% of disposable income, also net of allowances (Eurostat definition). It comes from the annual EU-SILC survey.

The last column of the table shows how little the measures line up. In 2025 the rate ran from 2.4% in Cyprus to 26.4% in Greece among the countries with data for that year. Greece's price-to-income ratio is only 109.7, while Portugal, with the highest ratio, has a rate of 6.3%. Denmark's 23.4% is flagged by Eurostat as a break in its series (14.6% in 2024), so it is best read with care. A ratio above 100 does not by itself mean that many households struggle to pay for housing, and a high burden can sit alongside a ratio close to the average.

Two more measures add context. Home ownership differs widely: in 2025, 47.2% of people in Germany lived in an owned home, with or without a mortgage, against 93.8% in Slovakia (Eurostat, EU-SILC). The cost of borrowing sits outside both ratios; see why mortgage rates differ across the euro area.

House prices, permits and the pipeline

The ratios are built on the OECD's own nominal house price index. The year-on-year house price figures on this site come from Eurostat's House Price Index, which tracks what households pay for newly built and existing homes and is explained in house prices, rents and inflation. In the second quarter of 2026 euro-area prices were 4.0% higher than a year earlier: new dwellings +4.3%, existing dwellings +3.9%. It is a rate of change, not a price in euros.

Building permits look ahead instead. Eurostat's series counts dwellings in new residential buildings for which a permit was issued, excluding residences for communities, as the change on the same quarter a year earlier, not seasonally adjusted. A permit is the final authorisation before work starts (Eurostat), so it counts a pipeline, not homes completed. It is also volatile: in the second quarter of 2026 the year-on-year change among the countries on this site ran from −43.2% in Slovakia to +112.0% in the Netherlands, with +10.7% for the euro area.

What the ratios leave out

• The loan. Neither ratio includes interest rates or the length of a mortgage. See the mortgage rate pages.
• Where and what. They describe a country as a whole, not one city, one type of home or one household's budget.
• Quality and size. An index tracks price changes; it does not say what a given sum buys in a given country.
• Timing. The ratios are quarterly and the overburden rate is annual, so the table mixes dates.

Reading the housing pages on this site

• The housing hub puts every indicator in one table with its own latest period.
• Price-to-income and price-to-rent rank the 15 countries; a country page such as Portugal or Germany shows the history.
• Housing cost overburden, building permits, new home prices, existing home prices and home ownership cover the rest.

The short version

• Both ratios divide the same house price index: one by disposable income per head, the other by rents.
• 100 is the country's own long-term average, so a ratio compares a country with its own history, not with other countries.
• The ratios and the overburden rate measure different things and often point in different directions.
• Permits are a pipeline, house prices a rate of change: neither is a price level.

Source: OECD (2026), Analytical house prices indicators (DSD_AN_HOUSE_PRICES@DF_HOUSE_PRICES), OECD Data Explorer, accessed 12 October 2026; Eurostat — housing cost overburden rate (ilc_lvho07a), home ownership (ilc_lvho02), House Price Index (prc_hpi_q), building permits (sts_cobp_q). euroflation is an independent tracker and is not affiliated with the OECD, Eurostat or the EU. Nothing here is financial advice.