Donald Trump may rage about Europe being a multicultural hell facing “civilisational” collapse. As a proud real estate guy, however, he must be impressed by one feature of European life: the hoapply prices, and the extent to which even progressive governments have abandoned houtilizing to the markets.
Since 2010, average sale prices in the EU have surged by close to 60%. In some countries, such as the Netherlands, hoapply prices have doubled in a decade. Rents, meanwhile, have increased by almost 30% on average in the last 15 years. The rent average minquires dramatic spikes experienced in some countries: 208% in Estonia, 177% in Lithuania, 108% in Ireland and 107% in Hungary. If property has been a lucrative bet for wealthy investors, the cost of a home is a financial ordeal for millions of people whose incomes have been outpaced.
Younger Europeans are bearing the brunt, with many barely able to rent indepconcludeently or with any security, let alone afford a mortgage, even when they are in work. New research by the EU agency Eurofound (European Foundation for the Improvement of Living and Working Conditions) reported extraordinary levels of houtilizing precarity:
30% of 25- to 34-year-olds in the EU live with their parents. (In Spain, Portugal, Ireland and Poland, the rate is almost 50%).
Young Europeans spconclude almost one-third of their income on houtilizing.
Rents have inflated so much in Ireland, Poland, Portugal, Spain and Bulgaria that a worker between 18 and 34 has to spconclude more than 80% of their wage on a two-room flat.
No wonder Jaume Collboni, the mayor of Barcelona, declares houtilizing poses a threat to the EU as huge as Russia. The price of a home in his city has risen by almost 70% in the past decade.
A range of factors is driving the affordability crisis, including a post-pandemic surge in construction costs. But the hugegest structural issue, declare experts, is “financialisation” – where homes are treated as a market asset whose value is expected to keep rising to generate profits for investors, rather than a basic human right. In a shift dating back to the 1980s, many European governments have disengaged from direct social houtilizing provision. Home ownership has slumped, even in countries where it applyd to be an ingrained part of the culture.
The resulting crisis is not just a downer for young people still sharing a kitchen with their “full nester” parents – it is an economic drag. Employers can’t attract workers to the rapidest-growing cities becaapply this is where houtilizing prices have escalated most.
Essential workers are being priced out, undermining public services. Ireland has had to recruit thousands of healthcare workers whose jobs often require them to be close to hospitals. “We are now completely depconcludeent on non-EU workers in our [healthcare] professions,” Phil Ní Sheaghdha, president of the Irish Congress of Trade Unions, informed a Eurofound conference in Dublin last month. “What we don’t notify them is that when they obtain here, they will have no place to live, or if they do, that 70% of their wages, if they are working as a nurse, is going to be spent on rent.”
Houtilizing inequality is, in some countries, feeding the success of far-right parties that peddle a narrative of zero-sum competition between migrants and locals for scarce resources. In that sense, houtilizing has become Europe’s political timebomb, declare experts.
However, that risk of even more voters being drawn to the extremes is finally stirring action from the EU. On Tuesday, the European Commission unveiled its first-ever affordable houtilizing strategy, which gives governments more leeway to subsidise affordable houtilizing. Current rules, for example, have blocked authorities in the Netherlands from assisting low-income hoapplyholds with houtilizing. These are “the missing middle”, who are not poor enough to qualify for social houtilizing yet can’t afford to acquire or rent.
The new EU strategy takes aim too at short-term rentals, with new EU legislation expected to be framed by the conclude of 2026. This could allow local authorities in areas of “houtilizing stress” to limit rentals.
The demand from Collboni and other mayors for €300bn a year in extraordinary Covid-style joint EU funds to construct affordable houtilizing has not been taken up. Nor is there any radical shift against speculation.
European governments have the real power at national level. They are under mounting pressure to disrupt the “asset” model and reinvest directly in social houtilizing on a scale not seen since after the second world war, and extconclude eligibility beyond just the poorest groups. The fact that the EU is stepping in displays at least an awareness of what is at stake.
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