Resource overview
The “Investment Report 2024/2025: Innovation, Integration and Simplification in Europe” is published by the European Investment Bank (EIB). It is produced by the EIB Economics Department and is directed by Debora Revoltella, with coordination and review by Laurent Maurin and Atanas Kolev, alongside contributions from a wider author team across multiple chapters.
Why it matters for sustainable housing in Europe
The report frames Europe’s economic transformation around three levers: market integration, simplification of rules and processes, and large-scale investment in innovation. It links these priorities to the green transition and highlights social investment as an enabler of competitiveness. Housing affordability and residential construction are discussed as part of the broader investment environment, especially in fast-growing cities where supply constraints can hinder labour mobility and productivity.
Housing affordability, supply constraints and productivity
The report notes that rigidities in the supply of affordable housing can increase labour misallocation and negatively affect growth and productivity, particularly in fast-growing urban areas. It also highlights challenges on the supply side of construction, including low productivity, insufficient innovation, skill constraints and regulatory obstacles such as difficult permitting processes. These barriers are presented as factors that can raise the cost and time needed to deliver housing projects.
Housing investment resilience and recent trends
A dedicated section on the housing market describes residential construction as resilient through recent shocks. Building activity slowed briefly during COVID-19 lockdowns in 2020, then stabilised in 2021 and expanded by more than 14% in 2022 and 2023, before easing by 7% year-on-year in the first half of 2024 as financing conditions tightened. The report also notes a surge of about 40% in residential building permits from mid-2020 to early 2022, followed by a backlog influenced by materials disruptions and construction worker shortages.
Energy transition progress and investment needs
The report positions Europe’s climate leadership as economically consequential. It states that renewable energy supplied almost half (48%) of Europe’s electricity demand in 2024 and that emissions from power generation fell 13% during the year. It also discusses the scale of financing required for the green transition, citing estimates of additional investment needs of around 2% of GDP for the green transition alone, alongside further needs tied to digitalisation, skills gaps and security and defence challenges.
Policy support, bureaucracy and enabling conditions
The report emphasises that reducing barriers and improving the business environment can raise growth, especially for investment-intensive and high-tech sectors. It reports that about 86% of EU firms employ staff specifically to deal with regulatory compliance, at an average cost of 1.8% of turnover (rising to 2.5% for SMEs). It also states that 16% of EU firms benefited from policy support in 2024 (subsidies or finance with favourable conditions) and that targeted support is associated with a higher probability of firms investing in energy efficiency, cleantech or innovation (reported as 20 percentage points higher when support is targeted).
Skills, inclusion and housing as part of social investment
The report links social investment to economic returns and labour participation, stating that raising female labour force participation in all EU countries to the highest EU standards could increase EU GDP by 4%. It connects labour mobility and opportunity to practical constraints, including housing affordability, and argues that addressing skills and social infrastructure supports competitiveness during the green and digital transitions.