Between 2010 and the third quarter of 2024, house prices in the European Union (EU) surged by 54.1%, while rents increased by 26.0%, according to Eurostat data. This significant rise in housing costs has outpaced both wage growth and inflation, intensifying affordability challenges across the bloc.
The housing crisis is particularly pronounced in countries like Spain, where rents have escalated by 80% over the past decade, compelling nearly half of the tenants to allocate 40% of their income to housing expenses. In response, the Spanish government has proposed a 12-point plan aimed at constructing affordable social housing, implementing rent caps, and imposing taxes on non-EU property buyers. However, these measures face political opposition and skepticism regarding their potential effectiveness.
Germany’s housing market is also under pressure, with house prices projected to climb by 3.5% in 2025. This increase is driven by strong demand and anticipated interest rate cuts by the European Central Bank. Nevertheless, rising construction costs and economic uncertainties pose risks to this forecast.
In Ireland, the housing shortage is acute, necessitating the construction of 93,000 homes annually until 2031, significantly surpassing the government’s target of 60,000 per year. Proposed solutions include reclaiming land for new developments and adjusting tax policies to encourage the construction of smaller dwellings.
The European Parliament has established a new committee to address the escalating housing crisis, acknowledging that average house prices have risen by 48% across the EU in less than a decade. This committee aims to explore comprehensive strategies beyond merely increasing housing supply, focusing on ensuring affordable and quality housing for all citizens.
Overall, the rapid escalation of housing costs in the EU underscores the urgent need for multifaceted policy interventions to enhance housing affordability and accessibility for all residents.
