Rising house prices and rents are putting affordable housing further out of reach across Europe. Credit : Edugrafo, Shutterstock
For years, Europe’s housing problems were described as “tight markets” or “temporary pressures”. Today, few people still believe that. Across the EU, finding an affordable place to live has become one of the most stressful and limiting parts of everyday life – especially for younger generations trying to get started.
The numbers tell part of the story. Since 2010, house prices across the EU have risen by more than 55 per cent, while rents are up nearly 27 per cent. Over the same period, incomes have grown far more slowly. But behind those figures are very real changes in how people live, where they work and what they put off for later.
For many young Europeans, the housing crisis isn’t something they read about. It’s something they deal with every month.
Young europeans are feeling the pressure first
A recent report from Eurofound, the EU body that looks at living and working conditions, shows that people aged 18 to 29 are among those hardest hit by the housing squeeze.
Young adults are more likely to struggle with rent and bills, and more likely to delay moving out or return to the family home. Not because they want to – but because the alternatives are often unaffordable.
Work opportunities are still concentrated in cities, so that’s where young people head. But cities are also where housing shortages are most severe. Demand keeps growing, supply doesn’t, and prices follow the same upward path.
Eurofound points out that many young people are facing this crisis at a decisive moment in their lives. Instead of building independence, they are forced into compromises: sharing overcrowded flats, living further from work, or staying with parents well into their late twenties or thirties.
In some parts of Europe, overcrowding has become common. In Romania, Latvia and Bulgaria, rates remain particularly high. Elsewhere, the problem looks different – smaller flats, higher rents, or long commutes – but the underlying pressure is the same.
Even young people who manage to live independently often spend a much larger share of their income on housing than older age groups. That leaves little margin if rents rise again, hours are cut, or contracts end.
In Some Countries, Renting Has Become Almost Impossible
In several EU countries, the rental market has reached a point where affordability is no longer the exception – it’s the rule.
In Portugal, Spain, Ireland, Poland and Bulgaria, as well as parts of Austria and Italy, renting a standard two-bedroom flat can require more than 80 per cent of the median salary in many areas.
Portugal stands out. By the end of 2025, the European Commission estimated housing prices there were around 25 per cent above fair value, making it one of the most stretched markets in the EU.
And this is no longer just a big-city problem. Coastal towns, tourist hotspots and areas popular with short-term rentals have also seen sharp price increases. For locals, especially younger workers, this has turned entire regions into places they can no longer afford to live.
The result is a quiet but growing sense of being pushed out – of towns, careers, and long-term plans.
Can Investment Fix a Crisis Years in the Making?
Governments are trying to respond, but unevenly.
Across the EU, 5.3 per cent of GDP was invested in housing in 2024, according to Eurostat. Cyprus invested the most, followed by Italy and Germany. At the other end of the scale, Poland, Latvia and Greece spent the least.
Last year, the European Commission acknowledged the scale of the problem by launching its first-ever EU-wide affordable housing plan. The strategy aims to tackle speculative behaviour, improve fairness in housing markets and increase supply.
At least €11.5 billion from the EU’s long-term budget is being mobilised, on top of €43 billion already committed to social and affordable housing. National and regional public banks are expected to invest up to €375 billion by 2029.
But even supporters admit the effects will take time. Homes can’t be built overnight, and markets don’t rebalance quickly.
In the meantime, the consequences of unmet housing needs are already visible. Delayed independence. Limited career choices. Strain on mental health. Decisions to postpone having children.
For many young Europeans, housing has become the single biggest factor shaping their future – more than education, more than work, more than ambition.
And until affordability starts catching up with reality, the question facing a growing number of young people isn’t where they want to live.
It’s whether living independently is still possible at all.
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