Europe’s Housing Crisis: Young People Bear the Brunt of Rising Costs

A decade of escalating housing prices and rents has led to a significant crisis across the European Union, affecting household budgets and reshaping living conditions. Since 2010, average house sale prices in the EU have surged by 55.4%, while rents have increased by 26.7%. This growth has outpaced income growth, leaving many individuals and families struggling to afford basic housing and utilities.

Young people, particularly those aged 18 to 29, are facing the most severe consequences of this crisis. A report from Eurofound, an organization dedicated to improving living and working conditions, reveals that this age group is disproportionately burdened by housing costs. Many young individuals are compelled to reside in urban areas where job opportunities are concentrated, yet these locations are also where the demand for housing far exceeds supply.

According to the Eurofound report, “Europe’s young people are facing this crisis at a pivotal life stage.” This situation often forces them into living arrangements they would prefer to avoid, such as moving back in with parents or relatives. Such arrangements frequently lead to overcrowded conditions, as affordable housing remains elusive.

The report highlights that in 2024, the highest rates of overcrowding were recorded in Romania (41%), Latvia (39%), and Bulgaria (34%), while Cyprus (2%), Malta (4%), and the Netherlands (5%) reported the lowest rates.

Even for those young people who manage to live independently, the situation is challenging. They tend to allocate a larger portion of their income to housing expenses, making them more vulnerable to financial strain compared to older demographics.

Current Investments in Housing Across the EU

Certain countries are attempting to address the housing crisis through increased investment. Regions such as Bulgaria, Ireland, Poland, Portugal, and Spain face such high rental market unaffordability that over 80% of the median wage is often needed to rent a standard two-room apartment.

Overall, the EU invested 5.3% of its GDP into housing in 2024, according to Eurostat. The highest investments came from Cyprus, at 8% of GDP, followed by Italy at 6.8% and Germany at 6.2%. In stark contrast, Poland invested the least at 2.2%, with Latvia and Greece close behind at 2.5% and 2.6%, respectively.

To tackle the housing crisis, the European Commission introduced its first Affordable Housing Plan, aimed at identifying speculative practices and promoting fairness in the housing market. The plan includes a commitment of at least €11.5 billion from the EU budget, added to an existing €43 billion allocated for social, affordable, and sustainable housing. Additionally, national and regional banks are projected to invest €375 billion by 2029.

Unmet housing needs can have serious repercussions beyond financial strain. These issues contribute to difficulties in achieving independent living, hinder career progression, negatively impact mental health, and may even delay family planning.

As the housing crisis continues to unfold, it remains vital for policymakers and stakeholders to address these challenges effectively, ensuring that young people and other affected groups receive the support they need to secure stable and affordable housing.