Brussels – European leaders are facing increasing calls for urgent and decisive action to address a deepening housing crisis that is impacting millions across the continent. From soaring rents to unattainable house prices, the affordability of housing has become a central concern for citizens and policymakers alike, prompting the European Commission to unveil its first-ever Affordable Housing Plan this week.
The crisis, years in the making, has been exacerbated by a complex interplay of factors including limited housing supply, rising construction costs, increased demand, and the impact of short-term rentals. According to recent data, average house sale prices in the EU have risen by 55.4% since 2010, while rents have increased by 26.7%, outpacing income growth for many, creating significant financial strain on households. The situation is particularly acute for young people, who are increasingly struggling to uncover affordable accommodation and are often forced to live with family or in overcrowded conditions.
EU Unveils Ambitious Housing Plan
In response to the growing crisis, the European Commission on Tuesday presented a comprehensive Affordable Housing Plan aimed at boosting the supply of affordable homes, curbing the impact of short-term rentals, and streamlining construction processes. The plan includes a revision of state aid rules to allow for the use of public funds for affordable housing construction, recognizing that addressing the issue requires significant investment.
“Europe must collectively seize responsibility for the housing crisis affecting millions of our citizens, and act upon it,” stated Housing Commissioner Dan Jørgensen, emphasizing that housing is a fundamental right, not merely a commodity. Jørgensen warned that inaction could create a political void exploited by extremist groups capitalizing on voter discontent. The Commission will also work with the European Investment Bank and other financial institutions to mobilize public and private investment through a pan-European platform dedicated to social and affordable housing.
Rising Costs and Regional Disparities
The scale of the problem varies significantly across Europe. In 2024, housing costs exceeded 40% of disposable income for 9.8% of households in EU cities and 6.3% in rural areas, according to data from the European Parliament. Greece faces the most severe challenges, with housing costs consuming 35.5% of household income – the highest share in the EU. Portugal is also experiencing significant overvaluation, with housing prices estimated to be around 25% above fair value at the end of 2025.
Between 2015 and 2024, house prices across the EU rose by an average of 53%. However, this average masks substantial regional differences. Hungary saw the largest increase, with house prices soaring by 209.5%, followed by Lithuania (+135%) and Portugal (+124.4%). Rents have also been on the rise, increasing by 27.8% on average between 2010 and the first quarter of 2025, with Greece being the only EU country to experience a decrease (-11%).
Impact on Vulnerable Populations
The housing crisis is disproportionately affecting young adults, particularly those aged 18-29, who are more likely to struggle with housing and utility payments. A recent Eurofound report highlighted that this demographic is often forced into suboptimal living arrangements, such as living with parents or relatives. Overcrowding is also a growing concern, with Romania (41%), Latvia (39%), and Bulgaria (34%) reporting the highest rates of overcrowded homes in 2024. Conversely, Cyprus (2%), Malta (4%), and the Netherlands (5%) have the lowest rates.
The European Economic and Social Committee (EESC) has also weighed in, insisting that the situation constitutes an “emergency” requiring immediate action. The EESC has convened stakeholders from across Europe to assess the crisis and discuss potential solutions.
As the EU moves forward with its Affordable Housing Plan, the focus will be on implementing these measures effectively and ensuring that they address the diverse needs of member states. The success of this plan will be crucial in mitigating the social and economic consequences of the housing crisis and ensuring that all Europeans have access to safe, affordable, and adequate housing.
The coming months will be critical as member states begin to integrate the new state aid rules and mobilize investment through the pan-European platform. Monitoring the impact of these initiatives and adapting the plan as needed will be essential to tackling this complex and pressing issue. What remains to be seen is whether these measures will be enough to stem the tide of rising housing costs and provide relief to those most affected.
What are your thoughts on the EU’s new housing plan? Share your comments below and let us know how the housing crisis is impacting your community.
