Resource context
This analytical report, “Housing affordability and sustainability in the EU”, is published by the European Construction Sector Observatory (ECSO). The report is presented as part of ECSO’s work to provide policy insights and evidence-based lessons for policy-makers on housing market conditions, affordability, and sustainability across EU Member States and cities. The document includes a disclaimer that the views are those of the authors; specific individual authors are not named in the accessible text.
Purpose and scope
The report aims to map the “state of play” of housing affordability and sustainability in the EU-28, identify key drivers and obstacles (regulatory, financial, and cross-cutting factors such as transport, energy and urban planning), review policy initiatives, and distil lessons for policy-makers. It uses comparable national and city-level statistical indicators to illustrate how affordability pressures concentrate in urban areas and affect lower-income households most.
Key affordability indicators (EU-wide)
Housing is described as both a service and an asset, with affordability framed through the housing cost overburden rate (share of people spending more than 40% of disposable income on housing). The report cites an EU-28 average housing cost overburden rate of 10.4% in 2017, while noting very large national variation (for example, Greece at 39.6% and Cyprus at 2.8%). It also highlights arrears as a related stress indicator: in 2016, about 1 in 10 people in the EU were in arrears on housing-related payments (mortgage/rent and utilities).
Urbanisation and unequal impacts
The report links rising affordability pressure to urbanisation and demand concentration in economic centres. It notes that house prices rose in most EU countries between 2010 and 2017, with particularly strong increases cited for Estonia (+46.6 percentage points), Sweden (+41.7%) and Latvia (+37.7%), while Spain and Italy saw declines over the same period. Urban areas host about two thirds of Europeans, and Eurostat projections referenced in the report indicate the share of people living in cities could reach over 80% by 2050. Affordability problems are described as disproportionately affecting households in the bottom 60% of the income distribution, especially in cities, and the report argues that breaking down data by income group and territory is essential because averages hide large differences.
Housing quality, building stock and hidden costs
Affordability is treated as more than price, incorporating housing quality and living conditions. The report describes Europe’s housing stock as ageing (with 75% built before 1979) and connects older stock to challenges such as energy efficiency and damp/leakage indicators in some countries. Overcrowding is used as a quality-related measure: the EU-28 total overcrowding rate is cited at 15.7% in 2017 (down about 2 percentage points from 2010). Environmental and neighbourhood issues are also quantified: 17.9% of Europeans report noise as a problem around their dwelling, 14.0% report pollution or environmental problems, and 13.0% report crime/violence/vandalism nearby.
Drivers and policy levers highlighted
The report groups drivers into sustainable urban planning, economic drivers (monetary and fiscal), financial instruments, and construction-sector productivity. It explains that very low interest rates can make borrowing cheaper but may also stimulate demand and contribute to price increases and volatility; therefore, some countries use macroprudential constraints (such as loan-to-value or debt-to-income limits). Fiscal measures discussed include energy-efficiency incentives that can reduce utility bills and energy poverty, while acknowledging trade-offs where renovations may lead to rent increases. The report also describes policy responses in four broad categories: support for affordable home acquisition; policies promoting affordable rentals; investment in social housing construction; and housing allowances for economically deprived households.
Sustainability and lessons for Europe
Sustainability is presented through both “material sustainability” (circular economy, reuse, reduced waste) and housing as part of holistic urban development. The report notes an estimate of around 11 million vacant homes in the EU (2014), framing reuse of vacant stock and brownfield redevelopment as part of boosting supply. It concludes with lessons including: embracing the complexity of affordability, taking a long-term perspective, improving coordination across governance levels, investing with effective financing tools, boosting supply (including reuse of vacant housing), and treating social, environmental and economic sustainability as integral to affordability solutions.