Rent inflation is surging across Europe, with Romania and Croatia experiencing the most severe increases. Between the second quarters of 2025 and 2026, actual rental payments in the EU rose by 3%, but in Romania, rents soared by 43.5%, followed closely by Croatia at 40.1%. After adjusting for overall inflation, rents in both countries increased by more than 30%. Slovenia also saw significant rent inflation, with a 10% rise.
The sharp increases in Romania and Croatia are attributed to changes in public housing policies. In Romania, the government cited the rise in administered rents for public housing as the main driver. However, Dr Adriana M. Soaita from the University of Glasgow disputed this, arguing that public rental housing is too insignificant to have such a large impact. She suggested that new builds or fully renovated properties entering the market may be the real cause.
In Croatia, the rent surge was linked to a decision by local authorities in Zagreb to increase rental prices for social housing. Prof. Gojko Bezovan from the University of Zagreb noted that a significant portion of Croatia's housing stock has been financialized, with investment properties dominating the market. A tax on vacant apartments introduced in 2025 led to more high-quality housing units entering the rental market, driving up rental rates.
When including EU candidates and EFTA countries, Turkey leads with the highest rent inflation at 49.6%. However, this increase was gradual, and overall inflation in Turkey was above 30%, meaning the real increase in rents was lower than in Romania and Croatia. Other countries with notable rent inflation include Serbia, Bulgaria, North Macedonia, Iceland, Greece, Czechia, Albania, Slovakia, Lithuania, and Portugal.
Among the EU’s Big Four economies, only Italy saw rent inflation above the EU average. In Germany, France, Spain, Belgium, Estonia, Finland, and Luxembourg, rents did not rise in real terms when adjusted for inflation. Experts note that strong competition for scarce rental housing is driving elevated price growth, particularly in cities with the highest rental growth.