Housing hardships hit home

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Radio România Internațional, 10.11.2025, 22:10

Housing hardships hit home

Rising rents and the high cost of borrowing are continuing to reduce access to affordable housing across Europe, with young people and key workers hit the hardest.

Over the last decade, house prices have risen exponentially – by an average of 53 per cent across the EU – with average rents also shooting up over the same period. Some countries have even seen prices triple.

Accommodation on the agenda

At a summit at the end of October, EU leaders discussed the housing crisis for the first time. While acknowledging that competences in this area remain at a national, regional and local level, António Costa, President of the European Council, is keen to discuss how the EU can complement and support member states’ efforts.

Following the summit, Luxembourg’s Prime Minister Luc Frieden expressed surprise that his country was not alone in struggling with this problem. He told journalists that the impressive increase of 60 per cent over the last ten years puts Luxembourg on a par with the European average.

Luc Frieden, Prime Minister of Luxembourg (in Luxembourgish):
“This was a very interesting exchange, showing me that [housing] is people’s number one concern in almost all EU countries. This was a bit of an eye-opener for me, because I had previously thought it was a problem confined to Luxembourg. I now realise that it is a widespread problem.”

The European Commission now has a commissioner responsible for housing, and the European Parliament has established a special committee on the housing crisis. Its brief is to develop policy recommendations, together with experts, stakeholders and citizens, for decent, sustainable and affordable housing across Europe.

Meanwhile, the Commission is working on its plan for affordable housing, which it is due to present in mid-December. This proposal will draw on the conclusions of the EU Council, with member states keen to ensure that they retain sufficient room for manoeuvre.
The general idea is to use EU initiatives and funding instruments to strengthen national efforts to provide, build and renovate affordable, accessible, safe and sustainable housing, and to fight homelessness.

A look at the figures

According to Eurostat, over 35 per cent of Greek citizens’ household income was used to meet housing costs in 2024. This was the highest national average in the EU.

Ilias Papageorgiadis is the CEO of MORE Consulting. The Greek investor, analyst and consultant specialises in real estate across Southeastern Europe.

Our colleagues at SKAI ask him why it is that a country with one of the highest home-ownership rates in the EU is now experiencing one of the bloc’s most severe housing crises.

Ilias Papageorgiadis, CEO of More Consulting (in Greek):
“I don’t think any country has truly managed to stabilise its housing market. The core problem is the same everywhere, people are flocking to major cities from the rest of the country, and large numbers of foreigners want to live there too. In Greece, this is combined with two additional problems that don’t exist elsewhere in Europe. First, we have hundreds of thousands of empty homes, both privately owned and properties held by the state or by banks. Second, we have very low purchasing power according to Eurostat data, which means that rent represents a much higher share of disposable income compared with other countries. That’s why the housing problem here feels even more acute.”

A report released by the European Council in October reveals that Lisbon, Barcelona and Madrid are the EU cities where citizens spend the highest percentage of their income on rent. Staggeringly, tenants in Lisbon are currently having to fork out more than their monthly salary to remain in their homes… a situation that is clearly unsustainable.

João Duque, economist and president of the Lisbon School of Economics and Management, outlines the key factors underlying this situation in a recent interview with Renascença – factors that are mirrored in many other European cities.

João Duque, President of the Lisbon School of Economics and Management (in Portuguese):
„This is greatly exacerbated by a shortage of supply, high construction and reconstruction costs, expensive financing, and pressure from external demand. Many people have been looking to move to Lisbon to live and find housing […]. All of this means that housing prices have been under a lot of pressure. And, in fact, we earn little. We have all the ingredients in place for this result.”

A widening divide

Homes across Europe have become so expensive that if you don’t own one already, it will be challenging to afford the down payment on one in pretty much any major European city… unless, of course, you have family money or a really high salary. So, the majority, who aren’t in such a fortunate position, find themselves miles behind from the outset.

Or at least this is the view of Cody Hochstenbach, an associate professor of urban geography at the University of Amsterdam. This housing expert tells The Europeans how the cost of housing is only serving to keep wealth concentrated in the hands of the most fortunate few.

Cody Hochstenbach, Associate Professor at the University of Amsterdam (in English):
“The top 10 per cent of the Dutch population owns about 40 per cent of all housing wealth and the bottom 50 per cent – so the bottom half – doesn’t own any housing wealth. This is quite a stark inequality, right? That the top 10 per cent has 40 per cent and the bottom 50 per cent has nothing at all.”

He goes on to point out that homeowners spend a much lower share of their income on housing than renters do, which only perpetuates the rich/poor divide. The ‘haves’ will continue to have, as they can also give their children a leg-up onto the property ladder, while the ‘have nots’… well, suffice to say they never will have.

In Lithuania, various models are now under consideration to make it easier for people to get on the housing ladder. For many years, housing policy in this Baltic country was almost non-existent, says Žinių Radijas. Recently, though, politicians have been making increasing noise about the difficulties faced by citizens wanting to purchase a home.

Yet Algirdas Sysas, a social democrat MP, believes that this focus on making everyone a homeowner is a major mistake, and that housing policy should instead prioritise accessible solutions for those who cannot, or do not want to, buy a home.

Algirdas Sysas, Member of the Lithuanian Parliament (in Lithuanian):
“The biggest shortfall is specifically in rental housing. This is very expensive because the market is small. In discussions around the budget, I have always encouraged my party colleagues to allocate more funds to municipal housing construction rather than to [various loan subsidies or down payment support]. Municipalities – both large and small – should have the ability to manage and provide rental housing. This would improve mobility as it would allow young professionals to move wherever they need to go. And if there were more rental housing in major cities, prices would drop as a result of a better alignment of supply and demand.”

Cody Hochstenbach can’t help but agree.

Cody Hochstenbach, Associate Professor at the University of Amsterdam (in English):
“I think we should invest in affordable rental housing. But I think we should also start thinking seriously about taxing the wealth tied up in home ownership, getting rid of all these advantages that we have in place for homeowners.”

Yet Filipe Santos, director of the Católica Lisbon School of Business & Economics, cautions against focusing on public housing – which he does believe is important – at the expense of high-end housing. He is speaking to Renascença.

Filipe Santos, Director of the Católica Lisbon School of Business & Economics (in Portuguese):
“I think we should not go down the path of saying that the problem is one of too much luxury housing, because we could kill this market, which is important for Portugal. This will not solve the problem of affordable housing and will destroy a market that is working and generating not only added value for the country, but also perpetual income. Let us not forget that Municipal Property Tax is paid on the property value of housing. So, a creative measure, in my opinion, would be to increase this tax in the luxury segment, channelling the additional revenue into public investment in affordable housing.”

Models to emulate

Many of us will remember the financial crisis of 2008. Mortgage payments shot through the roof at the same time as people were being laid off from work. And while Europeans were losing their homes, the governments were bailing out the banks and slashing social support.
Juha Kahila at Housing First in Finland tells The Europeans about how his government, at the height of this financial crisis, took the brave decision to invest 270 million euros over 10 years into making sure that every single Finn had an affordable home. They realised that if everyone had somewhere to live, their other problems would be easier to resolve.

Juha Kahila, Housing First (in English):
“People nowadays are saying that we don’t have the money to do anything, But we were able to actually put quite a bit of money towards the Housing First model because we wanted to change the system. It’s about what you prioritise, more or less. If you want to really do something, you can also find the resources to do it. I think political will is one of the magic words here.”

Finland is certainly reaping the rewards of its bold social policies, as the only EU country to be showing a steady, long-term decline in homelessness.

Vienna is another classic example of a ‘city doing it right’, report The Europeans, with half of its housing classified as social housing. In fact, the city owns so much property that it is very difficult for investors or private landlords to drive up rents or lobby for policies that benefit property owners.

The European Parliament’s special housing committee sent a delegation to Vienna earlier this year to get a firsthand impression of the city’s innovative social housing model. Committee chair Irene Tinagli highlights one of its more unusual aspects in this clip shared by AMS.

Irene Tinagli, Member of the European Parliament – S&D, Italy (in English):
“It’s very interesting in the fact that it’s so comprehensive; that compared to other places, it is dedicated to a really large portion of citizens. It’s not only dedicated to the most fragile people and citizens, but also to a large part of the middle class.”

The Italian S&D member also notes the unique mix of stakeholders involved in social housing construction in Vienna, where the public sector’s role in planning and access, combined with the involvement of the private and non-profit sectors, is practically unparalleled. Yet even Vienna needs more funding, with a rising demand for affordable housing – not to mention existing buildings requiring renovations.

And what about taking social housing a step further… to shared housing? Seventy-year-old Austrian Heinz Egger talks to Agora about his experiences of communal living and laments how ‘private’ society has become today.

Heinz Egger, 70-year-old Austrian citizen (in German):
“Anyone who has kept up with politics and tried to assess or analyse the situation will realise that we have undergone a fundamental change since 40 or 50 years ago, when I was going from adolescence to adulthood. We wanted to leave home as early as possible. And we did. We could. There really were shared flats. So when I travelled from Klagenfurt, where I lived, to Vienna, I didn’t think for a second: ‘Where am I going to sleep?’. I would just go to the nearest shared flat, ring the bell and say, ‘Hey, I need a place to sleep.’”

Yet our firm modern preferences for privacy make any hope of a return to this kind of collective living unlikely.

Climate concesions

Greece’s prime minister, Kyriakos Mitsotakis, has proposed the creation of a shared database to identify best practices from other countries facing similar pressures. He also, adds SKAI, wants to see the expansion of EU financial tools to tackle the housing crisis.

Indeed, surely European funds have an important role to play in shaping a stable housing policy, with the Recovery and Resilience Facility, the NSRF co-financing facility and InvestEU all available to support investments in affordable housing? Yes, replies our Greek expert Ilias Papageorgiadis, but it is vital to strike the right balance between social support and other EU priorities.

Ilias Papageorgiadis, CEO of More Consulting (in Greek):
“The biggest problem we have is not these funds, but the new strict restrictions on private construction that may be imposed in the coming years. And if this happens in Greece, if we are forced to ensure that all new private buildings have zero energy consumption, or if, for example, buildings that are currently rented out are required to undergo two or three levels of energy-efficiency upgrades, then we will find ourselves in a far worse situation than the already bad one we face today.”

Indeed, we must not forget the climate crisis in all of this. Energy efficiency upgrades are essential, despite their cost… and people who live in the home that they own are much more likely to invest in making their homes more sustainable than landlords are.

So, what else could Brussels be doing? Radio 24 puts the question to Italian architect Francesca Zirnstein, who is general manager at Scenari Immobiliari, an independent research institute analysing real estate markets and the economy in Italy and across Europe.

Francesca Zirnstein, General Manager at Scenari Immobiliari (in Italian):
“Perhaps the support that I think would be most important of all, beyond helping those who are truly in need, would be to support the industry so that it can succeed in providing a product that is sufficient in terms of both quantity and quality.”

With Commission chief Ursula von der Leyen pledging to host the bloc’s first-ever housing summit in 2026, at least it looks like this issue is going to remain on Brussels’ radar.