The European Union (EU) has witnessed a staggering 48% increase in house prices from 2010 to 2023, with additional housing costs, including utilities, soaring drastically in certain member states, as highlighted in Eurostat’s recent housing report.
In 2023, Ireland emerged as the country grappling with the steepest housing costs, which were double the EU average. Following closely were Luxembourg, with costs at 86% above the average, and Denmark, which was 80% above.
Conversely, Bulgaria and Poland boasted the most affordable housing, with costs falling below the EU average by 61% and 56%, respectively. Eurostat’s data shows that Irish housing costs escalated from 17% above the EU average in 2010 to a staggering 101%, more than doubling over the period.
Overall, 17 EU member states experienced rising housing costs between 2010 and 2023, while nine countries, including Greece, Cyprus, and Spain, saw a decline. Poland’s housing costs remained stable during this time.
House Prices Experience a Dip in 2023
Despite ongoing housing crises in various nations, such as Ireland, Portugal, and Spain, European house prices recorded a slight decrease of 0.3% on average in 2023. However, the overarching trend reveals a significant cumulative increase of 48% in property prices from 2010 to 2023, with Estonia leading the charge at a remarkable 209% increase, followed by Hungary at 191% and Lithuania at 154%. The only countries reporting a decline in property prices were Italy (-8%) and Cyprus (-2%), with Greece lacking sufficient data.
In contrast to house prices, rental costs have consistently climbed, registering a total increase of 22% from 2010 to 2023 across the EU, while inflation during the same span averaged 36%. Notably, Estonia saw the largest spike in rental prices at 211%, with Lithuania following behind at 169%, and Ireland’s rental prices doubling over this period.
The Affordability of Housing in the EU
On average, households within the EU allocated approximately 19.7% of their disposable income to housing in 2023, with the highest proportions found in Greece (35.2%), Luxembourg (27.6%), and Denmark (25.9%). In contrast, residents in Germany, Norway, and Switzerland each committed about a quarter of their disposable income to housing expenses.
For individuals deemed at risk of poverty in the EU, this rate was notably higher, averaging 38.2%. Despite these challenges, the percentage of people falling behind on mortgage, rent, or utility payments has improved, dropping from 12.4% in 2010 to 9.3% in 2023. Alarmingly, Greece showcased a stark contrast, with nearly half of its population facing such arrears.
Homeownership Trends in the EU
Homeownership rates vary significantly across the EU. In Romania, over 95% of the population owns their homes, closely followed by Slovakia, Hungary, and Croatia, where ownership exceeds 90%. In contrast, rental agreements are more common in Switzerland and Germany, with over half of the population renting.
Overall, about 69% of the EU’s population were homeowners in 2023, leaving 31% residing in rental properties.
Housing Preferences: House vs. Flat
Amidst the diverse living arrangements in the EU in 2023, more than half of the population opted for houses, while nearly 48% lived in flats, with only 0.6% choosing alternative accommodations like houseboats or vans. When examining country-specific choices, Ireland led with 90% of its residents living in houses, followed by the Netherlands (79%) and both Belgium and Croatia (77%). Spain had the largest proportion of flat dwellers at 66%, trailed by Latvia (65%), Malta (63%), and Germany (61%).
Investment Trends in Property Across the EU
Investment in property reached remarkable levels, with Cyprus allocating 8.6% of its GDP to real estate in 2023. Italy followed, investing 7%, alongside Germany (6.9%) and France (6.4%). In contrast, Poland and Greece invested the least, with rates of 2.2% and 2.3% of GDP, respectively. The overall average investment in housing across the EU was approximately 5.8% of GDP, amounting to around one trillion euros.
Photo credit & article inspired by: Euronews
