Housing investment needs in the EU

The document titled "Housing investment needs in the EU" was published by the European Commission's Joint Research Centre (JRC), which focuses on providing scientific and technical support for EU policies. The authors include Balouktsi D., Joossens E., Le Blanc J., Pagano A., and Zeugner S. This report highlights the pressing need for housing investment in the European Union, driven by demographic changes and urbanization trends.

Population trends in the EU show rising urbanization, an increasing number of households, and diverse migration flows, all of which are shaping housing demand. The EU housing stock grew from 218 million in 2010 to about 248 million in 2024. However, construction has not kept pace with demographic trends in one-third of NUTS 3 regions, leading to significant housing shortages.

Housing needs are uneven across the EU, with the most acute shortages found in urban and economically vibrant regions. Since 2010, these areas would require an additional 4.6 million homes to meet demographic demands. Projections for 2025-2035 suggest that housing needs will further increase by more than 2.5 million housing units, particularly in regions already experiencing shortages.

To address these demographic pressures, Europe must construct an additional 650,000 dwellings annually on top of the expected 1.6 million. This would require an investment of approximately €150 billion each year at 2024 prices. Over the period until 2035, total investment needs are estimated at €1.68 trillion, highlighting the substantial financial commitment required to meet housing demands.

The report breaks down housing investment needs into four components: accumulated shortfalls from insufficient construction from 2010 to 2024, dwelling needs due to demographic changes, replacement and amortization needs, and expected construction. The total housing needs until 2035 amount to 10.01 million housing units, with a construction gap of 7.14 million units.

The investment needs vary significantly across Member States, particularly pronounced in Germany, France, Italy, and Spain, which account for two-thirds of the total EU investment needs. Within Spain, nearly 70% of housing shortages are concentrated in five major metropolitan areas: Madrid, Barcelona, Valencia, Seville, and Alicante.

Major cities are experiencing higher investment pressures due to population growth and limited land availability. In contrast, many rural regions are expected to face lower investment demands. The report emphasizes the need for urban densification and better utilization of existing buildings to meet housing needs effectively.

The JRC's findings indicate that the EU must significantly increase its housing supply to keep pace with rising household numbers. Local assessments are crucial to target investment efforts in high-demand areas, ensuring that the needs of metropolitan populations are met while also addressing the disparities across various regions.