Relocation is outpacing housing supply in Europe. Who is funding the shortfall?

As relocation reshapes housing demand across Europe, rental markets are feeling the pressure first, particularly in cities where there is a shortage of professional rental properties. InRento, a platform that connects everyday investors with rental and renovation projects, is monitoring these shifts in countries where the gap between emerging demand and available housing is widest.

Across Europe, rising relocation rates are reshaping the housing market. In Ireland, just 1,777 homes were available to rent nationwide this February, 22 per cent fewer than the previous year. Meanwhile, Lithuania’s foreign worker population has grown from under 7,000 in 2020 to 170,600 today – a 20-fold increase – whilst new home sales in Vilnius have already risen by 83.6 per cent in a year.

These shifts are putting direct pressure on the rental and renovation markets across the Baltic states, Poland, Romania, Finland, Ireland and other European countries. Markets where supply once matched demand are now struggling to accommodate the new workforce. Platforms such as InRento, which connect investor capital with rental and renovation projects, are monitoring which markets are equipped to absorb that pressure and which are not.

A strong reputation for relocation attracts people to a city, and they look for rentals as their first step. A good example of this is Lithuania, which ranks highly for relocation: 6th globally and 3rd in Europe, according to the Rumavi Global Relocation Index. “A good relocation ranking is essentially an invitation, and the people who accept it are the first to enter the rental market,” says Bernardas Preikšaitis, CEO at InRento. “Nobody buys a flat in their first month. They rent for a year or two, get to know the city, and only then decide whether to stay.”

“But when such a high level of new demand meets low supply, rents react quickly. Rents in Vilnius rose by around 3 per cent in 2025, and the outlook for 2026 is 3–6 per cent, with international workers among the main drivers. And the next wave is already on the horizon,” says Preikšaitis. “Germany is stationing around 5,000 soldiers and their families near Vilnius by 2027, and that is already boosting demand for rental accommodation.”

It is the gap between rising demand and the supply of new housing where rents are hit hardest. Relocation brings thousands of new tenants into a market within a matter of months, whilst new homes take two or three years to be built. Cities with little rental supply have no buffer when that wave hits.

Across the Baltic states, Poland, Romania, Finland, Italy and Ireland, institutional landlords have a limited presence. For example, in Poland, which has the region’s most developed rental sector, just 30,000 flats are owned by institutional landlords. That represents only 0.1 per cent of all housing, whilst most rental properties are still owned by private individuals with one or two spare flats. Lithuania and Romania have even fewer professional rental properties on the market.

“The real enemy of tenants isn’t the institution, it’s scarcity,” says Preikšaitis. “Professional landlords build and renovate on a large scale, keep properties available for rent for decades, offer longer tenancy agreements, pay taxes and comply with energy regulations. When institutional investors pulled out of Ireland, the supply of rental properties dwindled even further. Supply fell, but rents did not.”

Recent European policy reflects this view. The EU’s first Affordable Housing Plan recognises housing shortages as a barrier to labour mobility and places private investment at the heart of its proposal. But it is not just large investment funds that benefit from the growth in rental housing. Ordinary investors can also get involved by investing in renovation and rental projects via crowdfunding platforms such as InRento. This means that the rise in demand does not merely benefit institutions; it enables more people to share in the returns whilst supporting the creation of new rental accommodation.

But not every market is in the same position to respond to the EU’s call for more private investment. Finland, for example, where a third of all homes are rented and institutional landlords are the norm, absorbs population movements without much disruption. Poland, by contrast, is faster-paced and more volatile. Romania and Lithuania, where home ownership exceeds 89 per cent, have rental markets that are small and slow to respond when large numbers of newcomers arrive all at once.

Overall, the pattern that holds true across all these markets is that supply determines outcomes, not regulation. Platforms such as InRento, which channelling capital from everyday investors into rental and renovation projects, are one way in which that supply is created in markets where professional landlords are still few and far between and pressure to relocate is mounting.