The EU's housing crisis

Overview of the Resource

The document is published by the General Secretariat of the EU Council, the central body that coordinates EU policies and communications. It presents the EU’s assessment of the current housing crisis, detailing price trends, affordability challenges, and the forthcoming EU plan for affordable housing. The content draws on data collected by EU institutions and reflects the perspectives of European policymakers and analysts.

Rising Housing Costs Across Europe

House prices in the EU have risen by up to 60 % on average since 2015, with some member states experiencing increases exceeding 200 %. Rent and energy costs have also climbed, while household incomes have not kept pace. As a result, housing now consumes almost one‑fifth of the average EU household’s income, and about one in ten Europeans report being unable to pay rent or mortgage on time. In major cities, one in ten residents spends more than 40 % of their income on housing.

Affordability Benchmarks and Projections

The EU considers a housing cost of up to 30 % of salary as optimal. Projections for 2025 show that in many major European cities the share of salary needed for rent will approach or exceed 100 %, meaning the entire salary would be required to cover rent. This highlights an alarming trend toward unaffordable housing in urban areas.

Divergent Homeownership Patterns

Homeownership rates vary widely across the Union. Approximately two‑thirds of Europeans own their homes, but ownership is over 90 % in Romania and just above 10 % in the Netherlands. Rental reliance is high in France (over 20 % of households) but very low in Sweden (0.6 %). Urban residents predominantly live in apartments (about 72 %), while 82 % of rural residents live in houses, indicating distinct housing market structures.

Regional Disparities and Demographic Pressures

Housing conditions differ by country due to varied market structures, legal frameworks, and financial systems. The EU’s urban population is projected to reach 83 % by 2050, intensifying housing pressure in fast‑growing cities. Tight rental markets, limited construction capacity, and rising interest rates further exacerbate affordability challenges in many regions.

EU’s Role and Planned Intervention

Housing policy remains a national competence, but the EU coordinates efforts through regional and local authorities. The European Council discussed the crisis in October 2025, urging the European Commission to develop a plan for affordable housing. The Commission’s plan is slated for publication in December 2025, focusing on financing, sustainable construction, planning, and social inclusion.

Key Elements of the Upcoming Plan

The draft plan emphasizes four priority areas:

1. Financing – Mobilising EU funds and private investment for affordable projects.
2. Construction and Sustainability – Promoting energy‑efficient building standards and circular construction practices.
3. Planning – Streamlining zoning regulations to increase housing supply.
4. Social Inclusion – Ensuring access to affordable housing for vulnerable groups.

Expected Impact on Sustainable Housing

By aligning financing mechanisms with sustainability criteria, the plan aims to reduce the carbon footprint of new housing and retrofit existing stock. Integrating energy‑efficient technologies is expected to lower long‑term utility costs, improving affordability while meeting EU climate objectives.

Conclusion for a Pan‑European Audience

The EU faces a multifaceted housing crisis marked by soaring prices, uneven ownership rates, and growing urban demand. The forthcoming EU affordable housing plan seeks to address these challenges through coordinated financing, sustainable construction, and inclusive policies. For stakeholders interested in sustainable housing, the plan offers a framework that combines affordability with environmental performance, aiming to ensure that European citizens across all regions can access decent, affordable, and green homes.