BestBrokers: Finland and Denmark lead Europe in housing affordability
In recent years, a confluence of factors has reshaped the housing market in Europe: mortgage interest rates have surged, while real estate prices have consistently outpaced wage growth. This growing imbalance has placed immense pressure on millions of prospective homeowners struggling to secure affordable housing.
Home prices remain stubbornly high across Europe, while mortgage rates have been slow to follow central banks’ recent interest rate cuts in response to easing inflation. For many first-time buyers, taking out a mortgage remains out of reach and homeownership is postponed indefinitely. But affordability looks very different depending on one’s location.
For this reason, the team at BestBrokers analysed the real mortgage interest rates in 67 countries, factoring in inflation data as of June 2025, and compared average property prices to local wages to better understand the ‘real’ cost of borrowing across global markets. The analysis highlights Finland as the most affordable country in Europe for prospective homeowners. There, the average annual salary amounts to just 11.84% of the cost of a typical 100-square-metre apartment, a rare balance between earnings and housing prices. It is followed by Denmark and Ireland, where the salary covers 11.15% and 10.04% of the same property type, respectively.
Here are some key takeaways from the report:
- With an average annual salary of €49,284 and property prices averaging €4,162 per square metre, Finland stands out as the most affordable country in Europe for homebuyers. Purchasing a 100-square-metre apartment would require less than ten years of earnings (101 monthly wages), a notably attainable timeframe compared to most other European nations.
- Coming in just after Finland are Denmark and Ireland, where the average annual income accounts for 11.15% and 10.04% of the price of a typical 100-square-metre apartment, respectively. Although Denmark’s property prices are steeper, higher incomes help maintain a similar level of housing affordability in both countries.
- Surprisingly, Cyprus ranks fourth in home affordability, with an average annual wage of €25,739 (9.8% of an average apartment price) and property price of €262,521. This places it ahead of countries like Italy and Spain, which have higher property prices but lower incomes, resulting in their positions at eighth and ninth in the ranking, respectively.
- Switzerland, despite having the highest average wage (€70,430), requires over 23 years of income to buy a home, underscoring how extreme property prices can offset strong earnings.
- Eastern European countries generally face tougher affordability, with some countries requiring around 30 years of wages for homeownership. Ukraine (31.2 years), Albania (28.3 years), Moldova (27.8 years), and Hungary (27.3 years) are among the most stretched markets relative to local incomes.‘Europe’s housing affordability gap is no longer just a story of “rich North, poor South.” Some of the highest income nations are already slipping into unsustainable territory as housing prices outpace wage growth, while parts of Eastern Europe may see gradual improvements if rising salaries continue to outstrip slower property inflation. The real dividing line is becoming one of housing supply and investment demand, not GDP per capita.
Looking ahead, mid-tier economies like Belgium, France, and the Netherlands could be on track for a “luxury market squeeze,” where homes increasingly behave like scarce investment assets rather than places to live, if zoning reforms and new construction fail to keep pace with demand.
Meanwhile, tourism-driven markets in Southern Europe may struggle to reverse affordability declines without tough curbs on foreign investment. By the late 2020s, Europe’s affordability map could look radically different, shaped more by political choices than by geography.’ - comments Paul Hoffman from BestBrokers.
