It's not just an urban legend. New study confirms that Romania has the highest percentage of homeowners in Europe

A study by Compare the Market Australia has ranked 26 European countries on factors such as homeownership rates, average property price per square meter, and average monthly rent in each country to reveal the countries with the highest homeownership rates in Europe.

Romania has the highest percentage of homeowners, with a 96.1% homeownership rate. That’s just under four percent more than Slovakia in second, and over 45% higher than in countries such as Germany. Properties in Romania cost an average of around €1,264 per square metre or €349 per month for rent, the second-lowest in the EU in both categories, with Bulgaria having the lowest average cost per sqm and rent prices.

The country home to the second-highest percentage of homeowners is Slovakia, with a homeownership rate of 92.3%. Properties in Slovakia cost an average of around €2,045 per square meter or €550 per month for rent. Homeownership in the country stood at around 50% during the 1980s but has skyrocketed since, with the real estate market booming following the fall of communism and no real rental market emerging.

Two countries were tied in third place, Hungary and Croatia, both with homeownership rates of 91.3%. Properties in Hungary cost an average of around €2,250 per square meter or approximately €453 per month in rent, whereas properties in Croatia cost an average of around €1,649 per square meter or approximately €414 per month in rent.

The European country with the lowest percentage of homeowners is Germany, with just over half of people being homeowners at 50.4%. Unlike the countries with the highest homeownership rates, Germany has a strong rental economy, with policies such as high transfer taxes on real estate purchases and no mortgage interest tax deductions making it harder to buy.

Germany’s neighbors in Austria have the second-lowest homeownership rate on the continent, at just 55.3%. Like in Germany, there’s a strong culture for renting rather than buying in Austria, with many of the same factors at play. Renting in Austria is also relatively affordable due to extensive social housing.

In third place is Denmark, with a homeownership rate of 59.3%. Denmark has high property prices averaging $4,900 per square meter, which could go some way to explaining why so few are able to buy their own homes.

“There is a similar correlation between both property and rent prices, and homeownership rates. In general, countries with a high cost of rent see lower homeownership rates, which may suggest that in such countries, potential home buyers find it difficult to save for a deposit to get out of the cycle of renting.” Says Hannah Norton, spokesperson at Compare the Market. “Generally, in the countries with the highest homeownership rates, such as Romania, the property prices are much lower per square metre. Whereas, in the countries with the lowest homeownership rates, such as Germany, the property prices are much higher per square metre.”

How does home ownership compare to property prices?

As we can see, the rate of people who own their home varies considerably, but how big of a role does the cost of property play in this?

When we compare the average property price per square meter with homeownership rates, we can see that there’s a definite trend for people in the more expensive countries to be less likely to own their homes.

Luxembourg, France, Germany, and Austria are all amongst the most expensive countries and also have the lowest rates of owner-occupancy; Norway is a notable exception to this.

And the opposite is broadly true for the more affordable nations; Romania is the second cheapest with an average cost of $1,443 per square meter, as well as the country with the highest ownership rate.

How does home ownership compare to rent prices?

The correlation between average rent prices and home ownership is very similar to that of property prices, which suggests that in countries such as Luxembourg, the Netherlands and Norway, where rent is the highest, people are still happy to rent despite these high costs.

The fact that rent prices are so high in these countries where home ownership is low could illustrate why it can be so hard to get out of the cycle of renting, when average rents in these prices take up such a large share of people’s budgets.