Italy ranks as the best European country to buy or rent a house

Europe offers a diverse range of options for buying or renting a house, each with its unique charm, amenities, and lifestyle. According to a study conducted by the Dutch website 123Jaloezie, analysing the most attractive places in Europe to look for a house to buy and rent, Italy ranks as the best European country to buy or rent a house. Let's find out why. 

Italy, the most popular country in Europe for real estate

Examining the affordability of real estate in each EU country, how property purchase and rental prices have increased since 2015 and the number of property searches in the last year, the study conducted by 123Jaloezie ranked the most popular areas for real estate in Europe.

At the top as the most popular area for real estate investment in Europe is Italy; the country has recorded the lowest house price growth since 2015, at 6.90%, and a very low average increase in rents, only 2.60%. More than 968,000 property searches were carried out in Italy in the last 12 months, indicating a growing demand for property in the country.

Hungary, on the other hand, was listed as the least desirable country in Europe for those wishing to buy or rent a home. Hungary has experienced an incredibly high increase in property prices, which have more than doubled on average since 2015. Furthermore, there are relatively few property searches focused on Hungary, with only 58,900 in the last twelve months.

Italy named the best place to buy and rent a house Unsplash

Top three European countries to buy a home

On the podium of the best European locations to buy or rent a home are the following countries:

Italy

• Real Estate Hotspot Score: 8.81

Italy has the highest Real Estate Hotspot score according to the research with a score of 8.81, making it a desirable location for people looking for a new home in Europe. The country has seen very low average increases in rental and property prices since 2015, at 2.60 per cent and 6.90 per cent respectively. Italy has received more than 968,000 property searches in the last 12 months, indicating strong interest from the public.

Spain

• Real Estate Hotspot Score: 8.71

Spain has the second highest real estate Hotspot score in the European Union with 8.71 out of 10. Spain attracted more than 100 million visiting tourists in 2022 and saw the highest number of real estate-related searches of more than 1.1 million. The country also benefited from a modest increase in rents of 6.37% since 2015.

France

• Real Estate Hotspot Score: 7.82

France ranked third with a Real Estate Hotspot score of 7.82. Rents in France have only increased by 2.60% since 2015, while the country also performed relatively well in terms of affordability and property searches.

The worst countries in Europe to buy a home

Hungary ranked the worst place for real estate Unsplash

Hungary

• Real Estate Hotspot Score: 0.77

Hungary recorded the lowest Real Estate Hotspot score with just 0.77 out of 10. This score can be attributed to an incredibly high increase in real estate prices, which have more than doubled on average since 2015. Real estate in the country is therefore relatively unaffordable relative to local disposable income, leading to a low affordability score. There are also relatively few real estate searches focused on Hungary, with only 58,900 in the last twelve months.

Lithuania

• Real Estate Hotspot Score: 0.89

Lithuania has the second lowest real estate Hotspot score in the European Union, 0.89, ahead of Hungary by 0.12 points. Although property prices have not risen as much as in Hungary, they have almost doubled in Lithuania since 2015, while rents have risen somewhat faster. Just under 34,000 property searches targeted the country.

Czech Republic

• Real Estate Hotspot Score: 1.16

The Czech Republic achieved the third lowest Real Estate Hotspot score in the study with 1.16 out of 10. The combination of high real estate price increases, low relative affordability and few searches is only mitigated by the slower increase in rental prices in this Central European country.

Methodology

To determine which EU countries are the most attractive to potential homebuyers, 123jaloezie compared the 27 EU Member States on the basis of four factors:

• the number of property searches in the last 12 months, extracted from Google Keyword Planner;
• the score each country received on Numbeo's property price index;
• the 2022 scores received by each country on the Eurostat house price index
• the average annual index for rental properties from Eurostat. 

These factors were then combined into a single 'Real Estate Hotspot Score' and ranked accordingly.