Housing affordability - How can capital markets and real estate deliver Europe’s housing transition?

Overview of the Video Resource

The resource is a Euractiv hybrid conference titled “Housing affordability – How can capital markets and real estate deliver Europe’s housing transition?” featuring a panel of European policymakers, industry leaders, and experts. It is hosted on YouTube by Euractiv and runs for 78 minutes, attracting 299 views. The discussion focuses on the EU’s housing affordability crisis, which has seen average house prices rise up to 60 % since 2015, and on strategies to combine sustainability with affordable housing across Europe.

EU Policy Context and Initiatives

European Commission representatives highlighted the Affordable Housing Initiative, aligned with the New European Bauhaus and the European Pillar of Social Rights, aiming to make housing more accessible and sustainable. The Commission is preparing an affordable‑housing plan that seeks to mobilise private capital, reduce bureaucratic hurdles, and support member states while respecting national competence over housing policy.

Key Housing Statistics

• Approximately 10 million housing units are missing across the EU, representing a supply deficit that drives price increases.
• Building permits have fallen by about 20 % over the past five years, indicating a slowdown in construction activity.
• Residential and commercial buildings account for nearly 40 % of Europe’s total energy consumption, linking housing efficiency directly to climate goals.
• In Brussels, 14 % of city officials consider housing still affordable, underscoring the widespread nature of the crisis.

Private‑Sector Role and Market Data

Von Vonia, Europe’s largest residential real‑estate owner, manages assets worth roughly €80 billion, with 70 % financed through capital markets. The company builds 3 000–4 000 new units annually and targets €200 billion of yearly investment to meet the 10 million‑unit gap and to triple refurbishment rates needed for climate neutrality by 2045‑2050. Institutional investors, particularly low‑risk pension and insurance funds, seek stable, long‑term returns and call for regulatory certainty.

City‑Level Strategies and Tools

Cities employ inclusionary zoning, municipal bonds, and land‑use incentives to steer private investment toward affordable and sustainable projects. Examples include:

• Requiring a share of new developments to be affordable housing.
• Providing free or low‑cost land to reduce equity requirements for developers.
• Coordinating cross‑border permitting to shorten approval times.
• Using public‑private partnerships to share risk and ensure rent caps or income‑targeted tenancy.

Regulatory and Financial Recommendations

Panelists advocated for:

• Simplified and faster permitting processes, reducing the typical 5–10 year timeline.
• Standardisation of construction products and building codes to lower costs and improve energy performance.
• Incentive‑based tax measures and long‑term subsidies that target the most vulnerable households rather than blanket support.
• A pan‑European investment platform to align financing conditions, share best practices, and facilitate cross‑border capital flows.

Public‑Private Cooperation Models

Successful collaboration examples involve:

• Trust‑building dialogues between municipalities and investors.
• Public provision of land or financing to lower private developers’ upfront costs.
• Conditional subsidies tied to affordability, sustainability, and tenant protection clauses.
• Leveraging EU instruments such as the European Investment Bank, structural funds, and state‑aid frameworks to de‑risk private participation.

Sustainability Integration

Energy‑efficiency retrofits are highlighted as a dual solution: they cut household energy bills and contribute to EU climate targets. Low‑hanging‑fruit projects include upgrading existing sub‑standard apartments (estimated €65 000 per unit) and applying EU‑wide standards like the ETS2 system to ensure consistent green building practices.

Outlook and Next Steps

The European Parliament is expected to adopt the affordable‑housing report in early 2026, with a summit planned for later in the year to formalise the housing alliance and the pan‑European investment platform. Ongoing efforts will focus on capacity‑building for local administrations, further simplification of EU legislation, and the creation of concrete work programmes to deliver affordable, sustainable housing at scale.