Rising real estate prices have turned home ownership into an increasingly unachievable dream for many Europeans — an issue compounded by the cost-of-living crisis, which has hit city residents and poorer households especially hard.
“The increase in housing prices is tremendous, and it’s even more severe in cities, especially large cities,” said Lamia Kamal-Chaoui, director of the OECD’s Centre for Entrepreneurship, SMEs, Regions and Cities. “And it’s no longer just impacting the poor, but also the middle class.”
House prices and rents have increased steadily since 2014, even during the COVID-19 pandemic, when — unlike previous economic downturns — the demand for housing surged, as extended lockdowns and the rise in teleworking kept people confined to their homes.
Right as the economy began to recover in 2022, Russia’s invasion of Ukraine brought a fresh array of budget headaches for governments — and a major cost-of-living crisis for households. Not only is housing more expensive, but it’s also increasingly harder to afford quality housing; many Europeans last winter faced mortgage and rent arrears or struggled to keep their houses warm.
According to Eurofound, younger residents are being hit hardest by the real estate crisis. Young Europeans live with their parents longer, are likelier to rent rather than own, and are often discouraged from seeking better jobs in areas with more opportunities because they can’t afford to live there.
This is a “major concern” for cities that “need young people to remain competitive,” said the OECD’s Kamal-Chaoui, who noted that “if [they] are not able to afford an apartment, they will never move to a city, no matter how attractive it is,” she said.
