Resource context (ECB Economic Bulletin box)
This resource is a box in the European Central Bank (ECB) Economic Bulletin, Issue 2/2025, prepared by Colm Bates, Christian Höynck, Omiros Kouvavas, Desislava Rusinova and Larissa Zimmermann. It uses microdata from the ECB Consumer Expectations Survey (CES) to analyse recent euro area rent developments and to help address the lack of fully harmonised, timely data on household rent expenditure across countries. Rents are highlighted as a major component of household spending, making their monitoring relevant for household affordability and macroeconomic conditions.
Who rents in the euro area (shares and affordability)
Across the euro area, renter households account for around 28% on average. The CES suggests that nominal rental expenditure is around one-third of households’ monthly income on average, but both the share of renters and rent burdens vary widely between countries. The share of renters ranges from about 15% in Italy to almost 50% in Germany and Austria. The renter share is also highest in the lowest income group, underscoring how rental-market outcomes can be unevenly distributed across households and income quintiles.
Cross-country differences in rent levels and dispersion
The CES points to substantial differences in both rent levels and within-country dispersion. Ireland, Austria and Belgium show the highest nominal rents. Ireland also exhibits very high rent dispersion, consistent with large location-dependent differences (for example, between urban and rural areas), visible in gaps between mean and median rents. By contrast, dispersion is described as much lower in Greece and the Netherlands. When rents are compared relative to household income, the ranking changes: Ireland still records the highest rent-to-income ratio, followed by Greece and Finland, while Germany has the lowest. The analysis also notes that countries with higher renter shares tend to have more high-income households renting, which can reduce the average rent-to-income ratio at the country level.
Rent growth since 2022 (easing but still elevated)
A CES-based rent expenditure growth indicator suggests rent growth eased after peaking in Q3 2023, but stayed above 3% in Q3 2024. The euro area year-on-year rent growth rate rose from early 2022 and reached above 5% in 2023, then declined gradually and remained close to 3% for much of 2024. The ECB notes the CES-based approach is more harmonised across countries than the Harmonised Index of Consumer Prices (HICP) rent component, because it follows changes for the same households whether they move or not. As a result, the CES indicator may be more responsive to inflation and the business cycle in some countries (Germany is given as an example), reflecting methodological differences permitted under HICP rules.
What drives recent rent increases (new contracts, cities, smaller homes)
Reported rent growth differs markedly across countries: over the latest 12 months in the CES, average year-on-year rent growth is above 7% in Ireland and Portugal, but below 3% in the Netherlands, Germany and Italy. A key finding is that rent growth per square metre has been driven more than proportionally by new rental contracts. Households that moved within the previous year report consistently higher rent growth than non-movers, and this gap has increased over the past three years. The box links this to tenant protections on existing contracts, which can shift rent adjustments toward new leases; it also notes movers often cite improving living conditions as the main reason for relocating. Although movers represent about 15% of renters, they account for roughly one-third of overall rent growth due to their higher increases. Rent growth has also been higher in cities than in suburbs and rural areas, with the difference widening recently, and CES data indicate somewhat higher rent growth for smaller dwellings than for larger ones.
Why the CES rent tracker matters (monitoring and next steps)
The ECB presents the CES-based rent tracker as a timely tool for monitoring rental-market developments and for analysing heterogeneity across households and countries. Future work is described as focusing on further validation (including cross-checks with external sources) and on assessing quality adjustments in rent growth by considering factors such as dwelling age, location and renovations, to better distinguish pure price changes from changes in housing quality.