Difficulty in accessing housing is becoming a major economic, social, and political problem in Europe.

Difficulty in accessing housing is becoming a major economic, social, and political problem in Europe, as property prices rise again across many countries, increasing pressure on households, especially renters and those looking to buy a home.

The fact that the European Commission (EC) has officially included the issue of housing on its agenda, even though this area does not fall under the direct jurisdiction of the European Union (EU), shows the seriousness of the situation. For the first time, in the autumn of 2024, a European Commissioner for Housing was appointed. In Brussels, the concept of a “housing crisis” is now openly used to describe the situation across the continent.

In fact, European families have felt this pressure early on. This is not a real estate crisis in the traditional sense, because house prices are not falling and homeowners are not directly suffering losses. Instead, the difficulties are concentrated on renters and those who want to buy a home. Rising house prices are creating negative economic consequences, limiting the mobility of workers to seek employment opportunities, causing young people to delay moving out on their own, and affecting demographic trends.

European Commissioner for Housing Dan Jørgensen emphasized that millions of Europeans are struggling to find affordable housing. According to him, the housing crisis not only affects social life but also hinders economic competitiveness and weakens the social cohesion of the EU. Earlier, EC President Ursula von der Leyen also acknowledged that many essential workers such as nurses, teachers, and firefighters can no longer afford to live in the places where they work.

An example illustrating the severity of this situation is a study by the German Bank showing that a working couple in Paris has to spend up to 83% of their disposable income on a 20-year loan to buy a 90 m² apartment, provided they have 20% of their own capital. The pressure of housing costs is increasing the feeling of backwardness among the middle class, while also contributing to deepening social divides and political polarization.

Since 2015, property prices have surged in many European countries, particularly in Eastern Europe. On average across the EU, house prices have increased by 58% since 2015. After a slight decline in 2022-2023, house prices have rebounded thanks to lower interest rates and controlled inflation. In the second quarter of 2025, house prices were projected to be 5.4% higher than the same period the previous year. Some countries recorded double-digit increases, with the Netherlands emerging as a special case with nearly 60% growth since the end of 2019; Germany and France remain below their peak prices recorded at the end of 2021.

In contrast to rising prices, housing construction activity has declined sharply. Over the past five years, the number of building permits in the EU has fallen by 20% and is now at a very low level. EC experts point out that structural barriers, high construction costs, and strict regulations continue to restrict the supply of new housing, thereby driving prices higher.

The European Investment Bank estimates that by 2025, the EU will need to build around 1 million more homes to meet demand, 70% more than the number built that year. Meanwhile, construction costs have increased by 56% since 2010, causing house prices to rise faster than household incomes, especially in urban centers – where jobs are concentrated.

Housing shortages in major cities are creating macro-level consequences. A 2024 study showed that rising housing costs in the Stockholm area reduce mobility, especially for young people and highly skilled workers. Numerous other studies have also indicated that rapidly rising house prices can stifle the growth of large urban areas.

Furthermore, the increasing dominance of financial capital in the housing market, with large investors buying up properties in city centers, is believed to have accelerated the rise in house prices and rents. This trend exacerbates the phenomenon of "upper-classification," pushing middle and low-income earners out of the urban core, while failing to contribute to expanding the supply of affordable housing.

Numerous studies in major European cities have shown that the activities of institutional investors do not improve people's access to housing, but rather exacerbate housing shortages and inequality.

With rising house prices, limited supply, and unmet demand, housing is projected to remain a hot topic with significant economic, social, and political implications in Europe in 2026.

Source: VTV

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