Most Affordable Cities to Live in Europe? Prague Is Out: 3 Cities Where Housing Prices Are Falling

23. 3. 2026

For years, Prague was considered one of the most affordable cities to live in Europe, attracting expats, students, and remote workers. But that’s no longer the case.

After a sharp rise in property prices over the past year, the cost of living in Prague has increased significantly. Today, the Czech capital is no longer among the cheapest cities to live in, especially when it comes to rent and real estate.

A prolonged slowdown in construction has pushed housing supply down, driving both property prices and rental costs up. And Prague is not alone. Across Europe, indeed, many cities once seen as budget-friendly are becoming increasingly expensive.

At the same time, a surprising shift is happening elsewhere. Some traditionally expensive global cities are now seeing property prices fall, opening new opportunities for investors and expats searching for the best affordable cities in Europe for expats and beyond.

Living in Warsaw: a temporary window of affordability

Poland has experienced a major construction boom in recent years, leading to a temporary oversupply in the housing market.

As a result, living in Warsaw is becoming more attractive. Property prices, especially on the secondary market, have dropped by around 2%, making it one of the cheapest cities to live in Europe right now.

Lower interest rates (recently falling below 5%) have also contributed to this shift. However, experts warn that this trend may not last long. Prices are expected to rise again, meaning that living in Varsavia could soon become less affordable.

Living in London: falling prices, but still expensive

It may sound surprising, but living in London is becoming slightly less pressured from a real estate perspective.

According to recent data, London recorded one of the fastest housing price drops since the 2008 financial crisis. This decline is largely due to new property taxes on high-value homes and the end of the “Non-Dom” tax regime, which previously attracted foreign investors.

Still, this doesn’t mean London is becoming cheap. The cost of living remains extremely high, and even with falling property prices, living in London is far from affordable for most people.

Living in Vancouver: lower prices, same affordability challenge

A similar trend can be seen outside Europe. Living in Vancouver, for example, has become slightly less expensive in terms of housing prices. According to the MLS Home Price Index, indeed, property values in Vancouver fell by 4.5% last December, contributing to a slowdown in the Canadian real estate market.

However, affordability remains a major issue. High property values, economic tensions with the U.S., and policies like the empty homes tax continue to limit access to the market.

Even with declining prices, living in Vancouver still comes with a high cost of living, making it inaccessible for many buyers and renters.

Affordable cities to live in and real estate: what is really changing?

The key takeaway? The real estate market is never truly predictable. Prices don’t move in a straight line, but rise and fall quickly in response to shifting economic and political conditions. That’s exactly what we’ve seen in Prague in recent years, where a surge in demand pushed many buyers into the market while prices were climbing.

Today, the Czech Republic is among the fastest-growing housing markets in Europe, with price increases exceeding 10%. Portugal tops the list with a 17.1% surge, followed by Bulgaria at 15.5%.

That said, some cities still stand out among the most affordable cities to live in Europe. According to estimates, Cities like Budapest, Brussels, and Athens continue to offer relatively accessible housing markets, making them appealing choices for anyone looking to balance cost of living and quality of life.