Your home is their hostage. How Europe turned property into a bad deal, and where owning still pays

A worldwide problem with a European twist#

For my parents’ generation, the home was the pension. Pay off the flat by sixty, live rent-free, leave it to the kids. Today young people from Toronto to Sydney to Madrid run the numbers and give up. The reasons are many: a decade of near-zero interest rates that pumped up prices, too little building, slow planning, cities that grow faster than their housing, wages that didn’t keep up. How many salaries a house cost then and now, and what else eats today’s budgets, is the story of the next article.

This one is about the part that’s made in parliaments and town halls. Europe has a habit of treating property as a cash machine that can’t run away. You pay a fortune to buy it, the state decides what rent you may charge, how you heat it and when you may have it back, and whenever money gets tight, a politician looks at your house. It can’t move. You can.

The numbers show it. Eurostat counts 68.5% of people in the EU living in a home they own, down from 70.2% in 2015. In the east, where people got their flats when communism ended, it’s over 90%: 93.8% in Slovakia, 93.2% in Romania. In the west it’s lower: France 61.4%, Austria 54.2%, Germany 47.2%. No EU country is lower than Germany. Ten years ago it was at 51.9%. Only Switzerland is lower, at 42%, and the Swiss have their reasons, which we’ll get to.

I’ll use Germany as the running example, because it manages to get almost everything wrong at once. But Spain, France, the Netherlands and others each have their own specialities, and in some of them they outdo the Germans.

A post on staatenlos.ch put it bluntly this year: sell German property while you still can. I don’t go that far, and that site sells the relocation services it recommends. But the direction is right, and not only for Germany.

What Hayek would have told them#

Before we go through the damage country by country, a lens. Friedrich Hayek, the Austrian economist who won the Nobel prize in 1974, wrote about almost every mistake in this article decades before Europe made it again. Four of his ideas explain most of what follows:

• Prices are information. In his essay “The Use of Knowledge in Society” (1945), Hayek argued that no planner can know what millions of people know about their own needs and plans. Prices pull that knowledge together. A rent is such a price: it tells builders where to build, owners when to renovate, tenants when to share or move. Cap it and you don’t remove the scarcity. You switch off the signal that would have ended it.
• Cheap money misleads. In “Prices and Production” (1931) he described how credit created by the banking system, beyond what real savings would supply, pushes interest below its natural level and makes projects look profitable that aren’t. New money never arrives everywhere at once; it changes prices where it enters first. The boom lasts as long as the cheap credit does. Europe ran that experiment with near-zero and negative rates for almost a decade.
• Every intervention breeds the next. A rent cap creates a shortage, the shortage gets blamed on landlords, and the next law goes after them. Hayek’s “The Road to Serfdom” (1944) is about where that road ends.
• The rule of law. The state should bind itself by general rules, fixed and announced in advance, so that people can plan their lives around them. Property is a plan for thirty years. Rules that change every parliament make it a bet on politics.

He didn’t write that from an armchair. In 1929 Hayek studied the rent restrictions Vienna had kept since the First World War. In “The Constitution of Liberty” (1960) he put the conclusion in one line: any fixing of rents below the market price “inevitably perpetuates the housing shortage”. Worse than the material damage, he wrote, was that people got used to asking officials for permission in the main decisions of their lives.

To be fair to him: Hayek was no anarchist. He accepted a minimum income for people who can’t support themselves, and town planning that works with prices instead of against them. What he rejected was the state fixing prices and deciding case by case who gets what.

Guess first

What share of people in Germany live in a home they own?

Show me

What you pay before you move in#

The state takes its first cut on the day you sign. Transfer tax, notary, land registry and the agent add up to this before you own a single brick:

On a €500,000 flat in Berlin that’s €58,000 gone. Not invested, not saved, gone. You need years of price growth just to get back to zero. That’s also why moving is so expensive in Germany and Spain: every new home costs you a small car or two. The Dutch at least spare people who buy to live in a home, and young buyers under 35 pay nothing up to €555,000. Investors pay four times as much.

The rate shock#

The next thing that changed is the price of money. Average rates on new mortgages:

Germany: Bundesbank, more than ten years fixed. The others: ECB, all fixation periods, including fees, so not exactly comparable. Malta: Central Bank of Malta.

Guess first

A €500,000 loan, with 2% of it repaid in the first year. How many euros a month does it cost at 4% instead of 1%?

Show me

To be fair: 4% isn’t high by history. German buyers paid 9.67% in 1990. The 1% of 2020 and 2021 was the anomaly, and it pumped prices up across the continent. Hayek would have called it by its name: a boom bought with cheap credit. Over the last ten years prices rose 182% in Portugal, 114% in the Netherlands, 97% in Ireland, 92% in Spain and 44% in Germany. France and Italy were the laggards, at 25% and 20%. But a ten-year average hides four very different worlds:

Eurostat house price index, Q2 2016 to Q4 2019, to Q2 2022, to Q4 2023, to Q2 2026.

• Before the pandemic the ECB already charged banks for parking money (a deposit rate of −0.5% from 2019) and bought bonds by the hundreds of billions. Prices rose steadily.
• During and right after the pandemic central banks printed money on a scale never seen before. The Fed’s balance sheet grew from $4.3 trillion in March 2020 to $8.9 trillion two years later. The ECB set up a €1,850 billion emergency programme, and the Eurosystem’s balance sheet reached €8.6 trillion at the end of 2021. Mortgages cost 1%. Dutch prices rose 38% and German prices 26% in two and a half years.
• Then the bill came. Euro area inflation hit 10.6% in October 2022. The ECB raised its deposit rate from −0.5% to 4% in fourteen months. German prices fell 12.5%, French and Dutch prices slipped.
• Now the ECB rate is at 2.25%, mortgages cost 3 to 4%, and prices are rising again, fast in the south (Spain +34.5%, Portugal +42.7% since the end of 2023), barely in Germany and not at all in France. My reading: in the south, scarcity now does what cheap credit did before.

That is what makes buying so hard today. The prices were set in the cheap-money world, the loans are priced in the post-inflation world. Today’s buyer pays 2021 prices or more at 2023 rates. And the inflation that followed has already taken back part of the gains: after consumer prices, Spain’s 92% is about 50%, the Netherlands’ 114% about 56%. Germany’s peak buyer is still behind, about 19% in real terms, and a lot of people bought at 1% with 30 years ahead and 10 years fixed. Their refinancing comes in 2031 and 2032. How affordability changed over the decades, in salaries and in everything else a household has to pay today, gets its own article.

The money machine behind the price#

Central banks get the headlines. But most new money isn’t printed by them. It’s created by ordinary banks, every time they lend. The Bank of England put it plainly in 2014: banks don’t lend out the savings people deposit. When a bank grants you a mortgage, it simply writes a new deposit into your account. That deposit is new money. The only brake in the euro area is a minimum reserve of 1% of deposits, which the ECB no longer even pays interest on, plus the capital rules and the interest rate.

And the capital rules point in one direction: towards houses.

• The favourite loan. Under EU capital rules, a mortgage on a home counts at 35% of its size when the bank works out how much capital it needs, as long as the loan stays below 80% of the value. A loan to a company without a rating counts at 100%. With the same capital, a bank can lend almost three times as much against houses as to a business that would create jobs.
• Risk shifted to you. The house is the collateral, and the bank also makes you insure it: building insurance always, often life or residual-debt cover on top. If it all goes wrong, you lose the flat and still owe the rest.
• The central bank buys the bonds. In its asset purchases the ECB also bought covered bonds, which are mostly backed by mortgages. Even the banks’ funding for home loans came cheap.

No surprise, then, where the money went. Economists Òscar Jordà, Moritz Schularick and Alan Taylor traced bank lending in 17 advanced economies back to 1870: the share of mortgages on banks’ balance sheets doubled over the 20th century. Banks today are mainly lenders against property.

What that means for everyone without a loan. New money doesn’t reach everybody at the same time. It goes first to whoever borrows it, and they spend it on houses. Prices rise before wages do. Economists call this the Cantillon effect, after the 18th-century banker Richard Cantillon who first described it.

Put it in numbers. Two people each have €10,000. One puts it down on a €100,000 flat and borrows the other €90,000. The other keeps it in the bank. Prices rise 15% in a year, as they did in parts of Europe in the money-printing years. The buyer is €15,000 richer while sleeping, a 150% return on their own money, minus a year’s interest. The saver earned next to nothing and lost to inflation. Same money, same year, and the only difference is that one of them got a loan. Leverage cuts both ways, of course: when German prices fell 12.5% after 2022, a buyer with 10% down lost more than their whole stake on paper. But for a decade the system paid people to borrow against houses, and charged everyone else.

Whoever borrowed early won twice: the house rose, and inflation shrank the debt. Whoever didn’t, the saver, the renter, the young, lost twice: their savings earned less than inflation for a decade, and the home they wanted to buy ran away from them. Renters pay too, because landlords who paid inflated prices need higher rents. It’s a transfer from people without debt to people with debt, from the young to the old, from wages to assets, organised by the monetary system, not by the market.

The bank decides who gets on. So right now it’s banks that decide who can build wealth and who can’t. Who gets the loan depends on their scoring and on supervisors’ rules about deposits and income: a permanent job, a clean credit file, the right age and the right passport help. The self-employed, the young, people who just moved country often hear no, and stay on the wrong side of the Cantillon effect.

And the whole construction can go haywire. It works only as long as three things hold:

• Demographics. Prices need new buyers. Eurostat expects the EU’s population to peak at about 453 million in 2026 and then shrink, to about 420 million by 2100, with the median age rising from 44 to 50. Japan shows what happens when a credit boom meets an ageing population: after 1991, land prices fell for more than a decade, to about 55% of their peak by the early 2000s.
• Rules. The 35% capital weight, the tax treatment, the rent law, the next levy: all of it is politics and can change within one legislature. A home bought on today’s rules is held under tomorrow’s.
• Money. The boom needed falling rates. From 1990 to 2021 German mortgage rates fell from almost 10% to 1%, and every step down lifted prices. That tailwind is gone. If rates stay where they are, or inflation forces them up again, the leverage that made the early buyers rich works the other way.

That, too, is Hayek’s point. His answer, in “Denationalisation of Money” (1976), was radical: take money away from the state and let currencies compete, so that nobody can create it at will.

The landlord’s cage#

Now let’s say you didn’t buy to live in it, but to rent it out. Then you meet the full rulebook, and every country has written its own chapter. Each rule below is a price, or a decision about your property, set by someone who can’t know what you know. That’s Hayek’s whole point.

What you may charge

• Germany: in designated areas a new tenant may be charged at most 10% above the local comparative rent (the rent brake, Mietpreisbremse). The Bundestag extended it in 2025, to the end of 2029. Temporary, of course, since 2015. Within a tenancy, rent may rise by at most 15 to 20% in three years.
• Spain: a housing law of 2023 caps rents in “tense zones”: 317 municipalities, 271 of them in Catalonia. In October 2026 the government decreed a 2% cap on all rent rises until the end of 2027. Parliament threw out the first version; the new one is due for a vote on 12 November.
• Paris: rents are capped at the reference rent plus 20%, with fines of up to €15,000. The cap runs out on 24 November unless it’s extended. The Senate has already voted for two more years.
• The Netherlands: since 2024 rents are regulated up to €1,228 a month, deep into the middle of the market.
• Austria: indexation of old leases is capped at 1% for 2026 and 2% for 2027. Vienna’s regulated reference rent is €6.74 per m². New leases must run at least three years, five if the landlord is a company.
• Ireland: rent rises are capped at the lower of inflation or 2%.
• Sweden: rent control for so long that Stockholm’s queue for a regulated flat is nine years on average.

Getting your flat back

• Germany: you need a legitimate interest to end a tenancy; wanting more rent isn’t one. Notice periods run up to nine months. A tenant who stops paying can stay 6 to 12 months while the eviction suit runs, and you advance the court and lawyer costs.
• Italy: a year and a half or more for a contested eviction.
• Portugal: even the fast-track office for evictions takes 293 days on average.
• France: no tenant may be evicted between 1 November and 31 March.
• Spain: the October decree suspends evictions of vulnerable tenants until 2030 when the landlord is a company that buys homes or bad loans, and for up to three years for others. And squatting is common enough to have its own word: okupación.
• Ireland: since March 2026 a landlord with four or more tenancies can’t end one to sell.

How you must heat and insulate it

• The EU told every member state to cut the energy use of its homes by 16% by 2030, mostly in the worst buildings, and not to spare rental homes. Brussels sets the target, the capitals pick the victims.
• France already bans letting the worst-insulated homes: class G since 2025, F from 2028, E from 2034.
• Germany makes landlords pay part of the tenant’s CO2 price, up to 95% in the worst buildings. The famous “65% renewable heating” rule of 2023 is gone since July 2026. In its place, anyone who installs a new gas or oil heating must make sure 10% of its heat comes from biogas or bio-oil from 2029, rising to 60% by 2040. Modernise, and you may pass on 8% of the cost a year, at most €3 per m² in six years.

And whether you may keep it

• Berlin froze rents by state law in 2020. The Federal Constitutional Court struck the law down in 2021. In the same year 59% of Berliners voted to “socialise” the big housing companies. In March 2026 the state parliament passed a framework law for it, which takes effect two years later. In September 2026 the Left Party became the strongest party in Berlin, with 25.7%.
• Spain bars large landlords from buying homes below 70% of market value until 2030. In Barcelona about 10,000 holiday flats lose their licence in 2028.
• Portugal forced owners to lease out empty homes, until it repealed the rule in 2024.

The result: fewer flats, higher rents#

And after all that, what happened to rents? Berlin’s asking rents rose by 69% from 2016 to 2025, Leipzig’s by 67%. Dutch investors sold about 65,000 rental homes in 2025 and bought only 27,000; a private flat in the Netherlands now costs €1,914 a month on average. In the Basque Country, deposits for normal leases fell almost 28% while those for short-term lets rose more than 52%. Landlords didn’t vanish, they just moved to the contracts the law doesn’t reach. Spain’s own government counts a shortage of 750,000 homes, and 26.8% of Spanish households who rent at market prices spend more than 40% of their income on it. In the EU it’s 18.6%.

Rents in existing contracts, meanwhile, fell after inflation over ten years: by about 10% in Spain, 11% in France, 8% in Italy. Sitting tenants won. Everybody looking for a flat, and everybody who might have built one, lost. That’s what price controls always do, and it’s what Hayek found in Vienna almost a hundred years ago. The Soviet Union didn’t have a rent problem either. It had a flat problem.

And watch the sequence in Spain: first rent caps in tense zones, then landlords switch to short lets, then short lets get restricted, then large landlords are barred from buying cheap, then evictions are suspended. Each new rule repairs the side effects of the last one. That’s the road Hayek described.

Here’s the honest part: these rules hit landlords, not people who live in their own home. But they shape the market you buy into: fewer investors build, fewer flats get offered, and the state has shown which side it’s on. And as you’ll see in the calculator, they have an odd side effect: where renting gets brutal, buying your own home becomes the escape.

The taxman’s long arm#

Taxes on the value, every year. Germany recalculated its property tax (Grundsteuer) from 2025. In total the municipalities collected the same €16.1 billion as before, but the bills moved: in the owners’ association’s model house, cities in Baden-Württemberg charged 82% more. Paris raised its property tax rate by 52% in a single year, 2023, and the French property tax rose 93.4% in twenty years against inflation of 36.8%. The Netherlands taxes a rental flat on a deemed return of 6% at 36%: 2.16% of its value every year, whatever rent actually comes in. France adds a wealth tax of 0.5 to 1.5% a year on real estate above €1.3 million.

Taxes when you sell. Germany taxes gains on a rented flat at your income tax rate (up to 45% plus solidarity surcharge) if you sell within ten years. Austria takes 30%, Ireland 31%. A home you lived in yourself is mostly exempt.

Taxes when you die. In Germany each child can inherit €400,000 tax-free. Above that, 7 to 30%, and since 2023 property is valued closer to the market. A family flat in Munich worth €1.6 million, split between two children, means about €120,000 of inheritance tax, often only payable by selling.

The wish list. Germany’s Left Party wants a wealth tax of 1% from €1 million up to 5% and more, real estate included. The German trade union federation (DGB) proposed in June 2026 a one-off levy of 10% on wealth above €10 million, explicitly modelled on the levy of 1952. In January 2025 Spain’s government announced a tax of up to 100% on homes bought by non-EU foreigners who don’t live there. It never became law. In France the Zucman tax on the very rich was voted down. None of this has a majority today. But note who’s asking, and how often.

If you think “they’d never”, look at German history:

• 1924: the house interest tax (Hauszinssteuer). Inflation had wiped out mortgage debt, so the state skimmed owners’ gains: in Prussia up to 48% of the pre-war rent. It financed a third of all housing investment in 1926. It was abolished in 1942, against a lump sum of ten years’ worth of tax.
• 1952: the burden-sharing levy (Lastenausgleich). 50% of the value of property as of June 1948, paid off over 30 years.

Both times the state went for houses because houses can’t leave. Hayek’s test was simple: are the rules general, known in advance and the same for everyone? A levy aimed at whatever can’t run away fails it. That hasn’t changed. What changed is that today you can buy a house somewhere else.

To be fair, some governments are going the other way. Portugal cut the tax on rental income from 25% to 10% in 2026. Ireland just cut capital gains tax. The Netherlands cut the transfer tax for investors from 10.4% to 8%. When governments see landlords leave, some of them learn.

Where owning still pays#

So where can you still buy property without the state moving in with you?

• Malta. Freehold ownership, no recurring property tax and a final tax of 15% on gross rent if you choose it. Stamp duty is 5%, and first-time buyers pay nothing on the first €200,000. Maltese banks lend at 1.93% (September 2026), half the rate in most of the eurozone. Prices rose about 6% a year over the last ten years. The downsides: it’s still the EU, with its directives, the market is small, prices are high (around €4,800 per m²) and yields are thin. Non-EU buyers and EU citizens buying a second home need a permit (AIP), except in special designated areas.
• Dubai. Freehold for foreigners in designated zones, a 4% transfer fee, no property tax, no income tax on rent and gross yields around 7.7% for flats. Disputes go to a special rental court that decides in a few months, not years. The downsides: the market is cyclical, about 55,600 new homes are due in 2026, the most since 2008, and service charges can be steep. The dirham is pegged to the dollar, so you’re also buying dollars.
• Texas. Landlord law that deserves the name: a non-paying tenant is out in about a month. No state income tax. But the state makes up for it with property tax: about 2.1% of the value a year in Austin, 2.0% in Houston. At a US mortgage rate of 7.24%, that adds up.
• Florida. Same speed on evictions, no state income tax, and a homestead exemption with a 3% cap on assessment rises if you live there. But home insurance has become a second mortgage: about $17,930 a year for a sample house in Miami against $3,101 for the US average. Florida voted on 3 November 2026 on raising the homestead exemption and halving the cap for non-homestead property; the result wasn’t in when I wrote this.
• Tbilisi, Georgia. Gross yields around 8 to 9%, 5% tax on residential rent, no tax on a sale after two years and buying costs of about 1%. The downsides are real: the lari lost 8.9% against the euro in ten years, lari mortgages cost about 12%, and Georgia’s EU accession is suspended. For money you can afford to lose, not for your pension.
• And the Swiss exception. Zurich is regulated, expensive and taxes the imputed rent of owner-occupiers (until 2029, when it’s abolished after a referendum). And yet condo prices rose 61% in ten years and the franc gained 17.7% against the euro. A stable country with a strong currency beats low regulation. Keep that in mind.

And a word on the US: foreign sellers have 15% of the price withheld at sale (FIRPTA), and non-residents owe US estate tax on US property above $60,000. Use the right structure, or your heirs will meet the IRS.

Here are all 21 cities side by side. The freedom score is my own rough measure; how it’s built is under the table. Tap a column to sort:

Where owning still pays: all cities compared

Tap a column to sort.

City	Freedom score	Gross yield	Net yield after tax	… with one bad tenant	Buying costs	Property tax / yr	Rent control	Eviction
🇬🇪 Tbilisi	90	9.0%	6.7%	n/a	1.0%	0.5%	none	n/a
🇦🇪 Dubai	83	7.7%	5.6%	5.3%	6.5%	0.0%	light	3 mo
🇲🇹 Malta	75	4.4%	2.6%	2.4%	7.0%	0.0%	light	4 mo
🇵🇹 Lisbon	72	4.0%	2.1%	1.7%	6.0%	0.2%	light	9.6 mo
🇺🇸 Miami	71	6.7%	1.0%	0.8%	3.0%	1.6%	none	1.2 mo
🇺🇸 Tampa	71	6.7%	1.4%	1.2%	3.0%	1.6%	none	1.2 mo
🇺🇸 Austin	68	4.7%	0.3%	0.2%	2.5%	2.1%	none	1 mo
🇺🇸 Houston	68	6.5%	1.5%	1.3%	2.5%	2.0%	none	1 mo
🇨🇭 Zurich	68	2.8%	0.8%	0.7%	0.8%	0.4%	strong	3 mo
🇮🇹 Milan	60	5.0%	2.6%	2.0%	6.9%	0.1%	light	18 mo
🇮🇪 Dublin	59	7.2%	3.3%	n/a	2.2%	0.1%	strong	n/a
🇸🇪 Stockholm	59	2.5%	1.0%	n/a	0.5%	0.0%	very strong	n/a
🇩🇪 Leipzig	54	3.5%	1.4%	1.1%	11.1%	0.1%	light	10 mo
🇪🇸 Madrid	54	4.3%	1.8%	1.4%	7.5%	0.3%	strong	10 mo
🇩🇪 Munich	50	2.9%	1.4%	1.2%	9.1%	0.0%	strong	10 mo
🇳🇱 Amsterdam	49	3.9%	0.7%	n/a	4.0%	0.2%	strong	n/a
🇩🇪 Frankfurt	48	3.4%	1.5%	1.3%	11.0%	0.1%	strong	10 mo
🇦🇹 Vienna	47	2.5%	0.6%	n/a	9.5%	0.0%	strong	n/a
🇫🇷 Paris	43	3.0%	0.7%	0.5%	7.7%	0.2%	strong	15 mo
🇪🇸 Barcelona	42	4.4%	1.8%	1.5%	11.5%	0.3%	very strong	10 mo
🇩🇪 Berlin	40	3.3%	1.4%	1.2%	11.6%	0.1%	very strong	10 mo

Score: my own rough measure, 0 to 100, equal weights for low buying costs, low property tax, no rent control, fast eviction of non-paying tenants and low tax on rental income. Where no reliable eviction figure exists, the score uses the other four. Net yield: rent minus 4% vacancy, property tax and upkeep, divided by price plus buying costs; then minus the typical tax on rental profit. With one bad tenant: one tenant in ten years who stops paying, so you lose the months until eviction plus about three months’ rent in court, lawyer and repair costs. Before financing, before price changes.

The costs the brochure leaves out#

Most buy-or-rent calculators compare a mortgage payment with a rent and stop there. The staatenlos post lists the costs that turn up later. The numbers are their estimates for Germany, not official data, but anyone who has owned a flat will recognise them:

• Upkeep that’s really needed. Sales brochures often budget a reserve of €0.50 per m² a month. In their example the owner pays €350 a month in service charges that can’t be passed on to the tenant.
• The big bill. A special levy of the owners’ association for heating and roof: about €30,000 in their example. A new roof or an energy refit costs around €300 per m². Craftsmen charge €70 to over €100 an hour, and some materials have doubled in price since 2020.
• The rate after the fixed period. Most European loans are fixed for ten years. Then you refinance at whatever the market charges, and for homes in energy classes D to H banks add surcharges or don’t lend at all.
• The tenant who stops paying. €3,000 to €8,000 advance for the bailiff, up to 18 months without rent, €20,000 to €40,000 in total.
• The sales commission. On new builds, 8 to 15% of the price goes to the sales network, and the buyer finances it.
• Tax on the sale. Sell a let flat in Germany within ten years and an €80,000 gain at a 42% rate costs €33,600.
• The next levy. Proposals for a “burden-sharing levy 2.0” range from a forced mortgage of 10 to 20% of the value to a wealth tax of 1 to 2% a year.
• Time and liquidity. You’re an unpaid facility manager, and you can’t sell a flat in a day.

I’ve built the ones that can be put into numbers into the tools on this page: the rate after ten years, real upkeep, a big bill in year ten and an optional extra levy go into the calculator below. The bad tenant goes into the table above, as one tenant in ten years who stops paying.

Buy or rent? Run your own numbers#

Enough opinion. Pick a city and run the numbers. The calculator compares two people with the same money. One buys: own money plus buying costs up front, then the loan, property tax and upkeep every month. The other rents and invests the same upfront cash, plus whatever the buyer pays more each month (or the buyer invests the difference when renting is dearer). After the years you choose, it compares what each has. The buttons above the rate set the typical mortgage rate of that country in earlier years. Below the main sliders are the costs most calculators leave out. Set them to zero and watch how much rosier buying looks.

Buy or rent? Pick a city and play with the rate

City🇳🇱 Amsterdam (Netherlands)🇺🇸 Austin (United States (Texas))🇪🇸 Barcelona (Spain)🇩🇪 Berlin (Germany)🇦🇪 Dubai (United Arab Emirates)🇮🇪 Dublin (Ireland)🇩🇪 Frankfurt (Germany)🇺🇸 Houston (United States (Texas))🇩🇪 Leipzig (Germany)🇵🇹 Lisbon (Portugal)🇪🇸 Madrid (Spain)🇲🇹 Malta🇺🇸 Miami (United States (Florida))🇮🇹 Milan (Italy)🇩🇪 Munich (Germany)🇫🇷 Paris (France)🇸🇪 Stockholm (Sweden)🇺🇸 Tampa (United States (Florida))🇬🇪 Tbilisi (Georgia)🇦🇹 Vienna (Austria)🇨🇭 Zurich (Switzerland)

Mortgage rate the typical rate in that country, then and now

Mortgage rate

%

30-year annuity, fixed for the first ten years.

Your own money

%

Share of the price you pay yourself. Buying costs come on top.

Flat size

m²

Years

yrs

Return on invested savings

%

After tax, per year. A world ETF has done more, a savings account much less.

Home price growth

%

Per year. The button below sets the last ten years.

Rent growth

%

Per year. Rent caps keep this low, if you already have a flat.

The costs most calculators leave out set them to zero and see how much rosier it looks

Rate after 10 years

%

Most European loans are fixed for ten years. Then you pay what the market charges, and banks add a surcharge for poor energy classes.

Upkeep and reserves

%

Of the value, per year. Sales brochures like to assume too little.

Big bill in year 10

€/m²

Roof, heating, insulation or a special levy of the owners’ association. A new roof or an energy refit costs around €300 per m². Rises with prices.

Extra levy on property

%

Of the value, per year. A scenario, not law: the wealth taxes and “burden-sharing levy 2.0” some are asking for.

Use the last ten years for price and rent growth

A model with your assumptions, not advice. Not included: mortgage interest relief, the hours you spend managing your property, the rent cap a sitting tenant enjoys, and the fact that a flat can’t be sold in a day while an ETF can. Data: see the sources at the end of the article.

What I find when I play with it, with 80 m², 20% own money, 20 years, 2.5% price and rent growth, 5% return on invested money, today’s rate after ten years, typical upkeep, a big bill of €250 per m² in year ten and no extra levy:

• Munich, Berlin, Frankfurt, Leipzig at today’s rate: renting and investing comes out ahead, and the buyer doesn’t catch up within 20 years. Without the big bill, Frankfurt would just break even. At the 2021 rate the buyer is ahead after five or six years, even when the rate jumps to today’s level after ten. That’s the whole German housing boom in one button.
• Paris and Vienna: renting wins clearly, even at the 2021 rate. Paris is too expensive for its rents, and Vienna’s regulated rents are cheap, if you can get one.
• Madrid, Amsterdam, Milan, Dublin: buying your own home wins at today’s rates, in Dublin from the first year, elsewhere within six to eight years. In Barcelona and Lisbon it takes 14 and 17 years once the hidden costs are in. Not because owning is cheap, but because renting is brutal: new tenants in Dublin pay €34 per m² a month, in Amsterdam €28.70. That’s the odd side effect of rent control: the flat you can actually get becomes expensive, so owning turns into self-defence.
• Stockholm: roughly even, but at the regulated rent you only get after years in the queue.
• The big bill alone costs the buyer about €42,000 after 20 years in every city: €20,000 for the repair plus what that money would have earned.
• A levy of 1% a year is enough to flip Madrid and Amsterdam to renting and to put the Munich buyer another €280,000 behind. That’s what a “burden-sharing levy 2.0” would mean for your home.
• With the last ten years’ price growth the buyer wins almost everywhere in Europe except Paris. So the question isn’t really buy or rent. It’s whether you believe the next ten years look like the last ten. With 4% rates, ageing populations and the rulebook above, I don’t.
• Malta and Dubai: buying pulls ahead within three to four years, because rent is high compared to the price and the costs of owning are low.
• Houston and Miami at 7.24%: renting wins. Great for landlords’ rights, expensive to hold. US property works with cash or a lower rate, less so with a 7% loan.

What a Hayekian housing policy would look like#

If governments had listened, most of this wouldn’t have happened. A housing policy in his spirit would be short:

• Let rents be prices, and help people, not prices. Whoever can’t afford a home gets money, a housing allowance, and chooses where to live. The price signal keeps working and builders keep building.
• Let people build. Fast permits, general rules on safety, no ministry deciding which heating is allowed. Houston, the biggest US city without zoning, has rents of about €8.80 per m² a month, less than a third of Amsterdam’s.
• No tax on moving. Transfer taxes punish every change of home and lock people into the wrong flat. Sweden and Texas manage without one.
• Sound money. No years of negative rates that turn houses into a bet on the central bank, and no capital rules that make mortgages the bank’s favourite product. Buyers would have paid for homes with savings and real interest, not with a bubble, and savers wouldn’t have paid for it.
• Contracts that hold. A tenant who doesn’t pay leaves in weeks, as in Texas or Dubai. That protects good tenants too, because landlords who can get their flat back dare to let to people without a perfect file.
• Rules that last. Low, general and predictable property taxes, no “temporary” caps renewed for ten years, no levies designed for one target.

None of this is utopia. Parts of it work today in Dubai, in Texas and, for owners, in Malta. Europe chose the opposite, and the results are in the tables above.

What I do with that#

My view, not advice:

• Where I live in Europe, the rent decides. Where rents are moderate compared to prices, as in Germany, Paris or Vienna, I’d rent and invest the difference. Where renting is brutal and I plan to stay for many years, as in Madrid, Amsterdam or Dublin, buying my own home is the better defence. Either way it’s a consumption decision, not an investment.
• I wouldn’t buy property to let in Western Europe’s big cities. You carry all the risk and the state decides the upside. Gross yields of 3 to 3.5% in Germany and Paris don’t pay for that. In Amsterdam the annual wealth tax alone takes 2.16% of the value from a gross yield of 3.9%.
• If I want property, I want it where the owner still has rights. Malta if I want to stay in the EU, Dubai if I want yield and no income tax, the US sun belt if I can live with property tax and insurance. Always as diversification out of the euro and out of the reach of one government, never as the whole plan.
• I wouldn’t panic-sell. If you own property, check your tax holding periods, your inheritance plan and your loan. Selling in a hurry to a buyer who knows you’re in a hurry is how you lose twice.

What if I’m wrong?#

Then it’s because of one of these:

• Owner-occupiers are barely touched by most of the rules above. If you buy to live in it, rent caps and eviction rules don’t matter to you.
• Buyers won big anyway, if they bought early. Prices rose 182% in Portugal, 114% in the Netherlands, 97% in Ireland and 92% in Spain in ten years, despite all the regulation. Whoever bought there in 2016 didn’t make a mistake. But they rode a wave of central-bank money, not a reward for free markets, and inflation has taken back part of it. Whoever bought at the 2022 peak in Germany or France is still behind, and today’s buyers start at peak prices with four times the interest rate.
• Policy has moved the owners’ way lately. Germany’s 65% heating rule is gone, Portugal, Ireland and the Netherlands cut taxes, and France’s wealth tax fights ended in the owners’ favour.
• Prices already fell by about 19% in real terms in Germany from the 2022 peak. Maybe the bad news is in the price there, and today is a good time to buy.
• Rents in existing contracts rose slower than inflation in Germany, Spain, France and Italy. Tenants with an old contract have done well. You might not get one.
• Free markets have booms too. Dubai’s prices swing hard, and sun belt cities can overbuild. Hayek would answer that the worst booms were fuelled by cheap credit, not by free prices, but a free market is no guarantee against losses.
• Zurich shows that a regulated market in a stable country with a hard currency can still make owners rich.

All true. My point isn’t that property always loses, or that markets are perfect. Hayek never claimed that either. His point was that nobody in a ministry knows enough to do better. It’s that across much of Europe the state has made itself a silent partner in your home, one that takes a cut when you buy, sets the rules while you own, and may come back for more when you die or when the budget breaks. I’d rather choose my partners.

This article is education, not investment, tax or legal advice. It contains my opinion, scenarios with the sums shown and no product tips.

Sources#

• Eurostat, distribution of population by tenure status (ilc_lvho02)
• F. A. Hayek, The Use of Knowledge in Society, 1945 (Econlib)
• Austrian business cycle theory, after Hayek’s Prices and Production (1931)
• F. A. Hayek, The Road to Serfdom (University of Chicago Press)
• F. A. Hayek, The Constitution of Liberty, 1960, chapter 22: Housing and Town Planning
• IEA, Verdict on Rent Control (1972), with Hayek’s 1929 essay on Vienna
• FEE, the psychological consequences of rent control (quotes from The Constitution of Liberty)
• Houston, the largest US city without zoning
• Staatenlos.ch, “Betongold war gestern”, 2026
• ImmoScout24, real estate transfer tax by state, May 2026
• Bundesbank, interest rates on new housing loans with initial fixation over 10 years
• Bundesbank, older series of 10-year fixed mortgage rates
• Destatis, house price index
• Civil Code § 556d (rent brake), § 558 (cap on rises), § 559 (modernisation), § 573c (notice periods)
• LTO, Bundestag extends the rent brake until 2029
• ZDFheute, asking rents in large cities 2016–2025, 6 April 2026
• Federal Constitutional Court, Berlin rent cap void, 25 March 2021
• Haufe, Berlin passes socialisation framework law, 13 March 2026
• Federal Agency for Civic Education, Berlin state election 2026
• Buildings Modernisation Act (GModG) § 71, repealed and § 43, bio-fuel quota for new gas and oil heating
• Fachanwalt.de, duration and cost of eviction suits
• Destatis, property tax revenue 2025
• Haus & Grund, property tax ranking 2025
• Income Tax Act § 23 (ten-year rule), Inheritance Tax Act § 16 and § 19
• Bundestag, debate on the Left Party’s wealth tax motion, March 2026
• DGB, position paper on a wealth levy, 1 June 2026
• Federal Archives, the burden-sharing levy of 1952
• ImmoScout24, what the Lastenausgleich was
• ImmoScout24 WohnBarometer Q3 2026, rents
• BOE, Royal Decree-Law 29/2026 (Spain)
• Taxdown, tense zones in Spain
• Moncloa.com, PNV on the housing decrees and lease deposits
• Comunidad de Madrid, transfer tax
• La Moncloa, end of the golden visa, 2 April 2025
• Xataka Home, Barcelona tourist flat licences
• Service-public.fr, rent cap in Paris and Public Sénat, Senate extends it by two years
• Legifiscal, Zucman tax rejected by the National Assembly
• French ministry of ecology, letting bans for poorly insulated homes
• Banque des Territoires, property tax up 93.4% in 20 years
• Service-public.fr, winter eviction ban
• impots.gouv.fr, real estate wealth tax (IFI)
• Notaires de Paris, historical apartment prices
• SRA, box 3 rates and transfer tax 2026 (Netherlands)
• Volkshuisvesting Nederland, maximum rents
• NL Times, Pararius rent report Q3 2026
• NOS, investors sold 65,000 rental homes in 2025
• Portal das Finanças, Decree-Law 97/2026 (Portugal)
• DN, Portugal’s fast-track eviction office
• Revenue, Irish stamp duty rates
• Agenzia delle Entrate, first-home purchase tax (Italy)
• RIS, Federal Law Gazette I 114/2025, rent indexation (Austria)
• Bostadsförmedlingen Stockholm, annual report 2025
• Lavelle Partners, Irish tenancy reform 2026
• William Fry, Irish Budget 2027
• ECB, interest rates on new loans to households for house purchase (MIR)
• Eurostat, consumer prices including actual rentals (prc_hicp_midx)
• EUR-Lex, Energy Performance of Buildings Directive (EU) 2024/1275
• Bank of England, Money creation in the modern economy, Quarterly Bulletin 2014 Q1
• ECB, minimum reserves
• EUR-Lex, Capital Requirements Regulation (EU) No 575/2013, Article 125 (35% for residential mortgages)
• ECB, asset purchase programme including covered bonds (CBPP3)
• Jordà, Schularick, Taylor, The Great Mortgaging, Federal Reserve Bank of San Francisco working paper
• Cantillon effect
• Eurostat, population projections in the EU (EUROPOP2023)
• Cabinet Office of Japan, causes of deflation, land prices at 55% of their peak
• Federal Reserve, balance sheet developments, May 2022
• ECB, pandemic emergency purchase programme (PEPP)
• ECB, consolidated balance sheet of the Eurosystem 2022
• ECB, key interest rates
• Eurostat, euro area inflation (prc_hicp_manr)
• Eurostat, house price index
• Central Bank of Malta, MFI interest rates
• PwC Worldwide Tax Summaries, Malta individual
• Frank Salt, buying property in Malta
• Property Finder, Dubai Land Department fees
• Khaleej Times, Dubai Q3 2026 transactions and yields
• Khaleej Times, Dubai home deliveries 2026
• Freddie Mac, Primary Mortgage Market Survey
• Zillow research data (home values and rents)
• Property Tax Almanac, largest counties
• InsuranceQuotes, Florida home insurance rates, September 2026
• JMCO, Florida property tax amendment on the 2026 ballot
• IRS, FIRPTA withholding and estate tax for nonresidents
• GBC, Tbilisi apartment prices and yields
• PB Services, individual property taxes in Georgia
• Statistik Stadt Zürich, condo prices
• Swiss Federal Council, abolition of the imputed rental value from 2029

Education, not advice. I don’t know your situation, and past returns promise nothing. Check my numbers, then make your own call. You’re a grown-up.