Regional Housing Cost Disparities Across Europe
Housing costs as a share of disposable income vary significantly across European regions. The UK shows the largest disparity, yet it also contains regions with some of the lowest proportions of housing costs relative to income.
In recent years, housing and living crises have deeply affected Europe. Inflation in 2022 reached its highest level in over 40 years, impacting households unevenly. Residents of capitals and larger cities faced greater housing cost burdens compared to those in smaller cities or rural areas.
The OECD’s Regions and Cities at a Glance 2024 report highlights regional housing cost differences within countries. This analysis measures housing costs as a percentage of disposable income. These costs include rent (actual and imputed), mortgages, and home maintenance such as utilities, furnishings, and repairs.
On average, households in OECD regions allocate nearly one-fifth of their income to housing. In 2022, the gap between the most and least expensive regions in the same country averaged about ten percentage points. Among 11 European countries analyzed (9 EU members, the UK, and Switzerland), the UK (16 pp) and Italy (14 pp) exhibited the largest gaps.
UK: The Largest Housing Cost Disparities
In the UK, households spent 16.1% of their disposable income on housing, on average. However, this rose to 24.4% in Greater London—51% higher than the national average. The North recorded the lowest share at 8.7%, followed by Scotland at 11.3%. This led to a 15.7 pp gap, the widest among all regions, representing a disparity of 181%.
Greater London is an outlier, with South East England, the second-highest region, recording 17.9%—6.4 pp lower. Despite the UK’s significant disparities, it also contains seven of the least expensive regions among the analyzed countries, showing that high disparities do not always mean high overall housing costs.
Italy: Significant Regional Housing Cost Differences
In Italy, housing costs consumed 25% of disposable income on average. Campania, centered around Naples, had the highest proportion at 31.2%, while Marche recorded the lowest at 17.1%. This represents a gap of 14.1 pp, an 82% disparity.
Other regions saw smaller differences. Bolzano-Bozen and Trento followed closely at 31.1%, while Abruzzo recorded 29.1%. These figures highlight variations but do not match the extremes observed in Greater London.
Spain: The Balearic Islands Lead Housing Costs
In Spain, housing costs averaged 26.3% of disposable income. The Balearic Islands, home to Mallorca, were the most expensive region at 30.4%. Galicia, at 20.3%, was the least expensive, marking a gap of 10.1 pp. This makes the Balearic Islands’ costs 50% higher than Galicia’s.
Murcia (30.2%) and Madrid (30%) followed closely, while Catalonia reported 27.1%. These figures indicate a notable but less extreme disparity compared to countries like the UK.
Other European Regions and Key Insights
In Austria, Vienna led with housing costs at 29.9% of disposable income, compared to 22.1% in Upper Austria, resulting in a 7.8 pp gap. Switzerland’s Lake Geneva was the most expensive region among all analyzed, with households spending 36.3% of their income. Ticino followed at 34.9%, underscoring Switzerland’s high national housing costs.
In Slovakia, Bratislava’s housing costs reached 33.2%, with only a 3.8 pp gap to the region with the lowest share. Gaps were even smaller in Ireland (4.8 pp), Estonia (4.4 pp), and Sweden (3 pp). However, their overall housing costs varied, from Estonia’s 17% to Sweden’s 29.7%.
Urban Versus Non-Urban Housing Costs
The OECD report reveals that housing costs are generally higher in urban areas. Price fluctuations have a smaller impact in cities than in non-urban areas.
Homeownership Trends and High-Cost Regions
Homeownership rates are lowest in regions with the highest housing costs. For instance, Vienna’s homeownership rate is only 19%, compared to Burgenland’s 74%. Similarly, Lake Geneva has a homeownership rate of 31%, while Greater London reports 54%. Lithuania is the only exception among the analyzed countries, where high-cost regions do not align with low homeownership rates.
The OECD data sheds light on how housing costs disproportionately impact urban residents, particularly in high-cost regions. These disparities underline the need for tailored housing policies across Europe.