Which European countries are hit the hardest by annual rent inflation and why?

Rent prices across Europe have been on the rise, with some countries experiencing significantly higher increases than others. Romania and Croatia stand out as the two most affected nations, with rent inflation reaching 43.5% and 40.1% respectively, according to Eurostat data. This is considerably higher than the EU average of 3%, which saw rental payments rise by 3% between the second quarters of 2025 and 2026.

In Romania, the primary driver of the rent increase is the government's decision to raise the administered rent for public housing. However, Dr Adriana M. Soaita from the University of Glasgow believes that this explanation is insufficient, as public rental housing makes up a small portion of the overall housing stock. She suggests that the actual reason for the high rent increases may be due to new builds or fully renovated properties entering the market, which would not be captured in the Eurostat methodology.

In Croatia, the rise in rents is attributed to the decision made by local authorities in Zagreb to increase rental prices for a specific category of social rents. Additionally, Prof. Gojko Bezovan from the University of Zagreb points out that a substantial share of Croatia's housing stock has become financialized, with investments in apartments and tourism-oriented real estate being the dominant form of savings. As a result, a large number of apartments in new developments remain vacant, leading to higher rental rates.

Turkey has the highest rent inflation rate in the EU, at 49.6% year-over-year between the second quarters of 2025 and 2026. However, unlike Romania and Croatia, Turkey did not experience a sudden sharp rise in rent prices. Instead, rents have been gradually increasing, resulting in a lower real increase compared to Romania and Croatia. In contrast, other EU countries such as Italy, Spain, Germany, and France saw rents rise, but not in real terms when inflation is taken into account.

Factors contributing to the rent increases include economic factors, demographic factors, and supply-side constraints. In Romania and Croatia, the financialization of the housing market and the increase in vacant apartments have played significant roles. In Turkey, the gradual rise in rent prices can be attributed to the general economic conditions in the country.