Europe is in a housing crisis: since 2010, average house sale prices in the EU have risen by 55.4% and rents by 26.7%, outpacing income growth for many groups.
At the end of 2025, the European Commission estimated that the average overvaluation of housing prices in Portugal is around 25% above fair value, “surpassing other property markets” in the bloc.
This is hitting young people particularly hard, especially those between the ages of 18 and 29, as they are more likely to fall behind on paying for housing and utilities, according to a recent report by Eurofound, a foundation which focuses on the improvement of living and working conditions.
Young individuals also tend to seek accommodation in urban areas, where employment opportunities are concentrated, but it is also where the gap between demand and supply is most acute.
“Europe’s young people are facing this crisis at a pivotal life stage, forcing many into living arrangements they would not otherwise choose, such as living with parents or relatives,” the report noted.
But this can often lead to overcrowded accommodation, as people struggle to find affordable housing of their own.
In 2024, the highest overcrowded home rates were observed in Romania (41%), Latvia (39%), and Bulgaria (34%), and the lowest in Cyprus (2%), Malta (4%) and the Netherlands (5%).
Yet the situation isn’t much better for those young people who do manage to live independently of their parents: they spend notably more of their income on housing and are more likely to be overburdened with housing costs, compared with other age groups.
Which EU countries are investing in housing?
In Bulgaria, Ireland, Poland, Portugal and Spain, and in parts of Austria and Italy, the degree of unaffordability in the rental market is such that, in many areas, more than 80% of the median wage would be required to rent a standard two-room apartment.
Nevertheless, some countries are investing in housing to try and offset the worst of the crisis.
In the EU in 2024, 5.3% of GDP was invested in housing, according to the latest Eurostat data.
Cyprus was the EU country investing the most at 8% of its GDP, followed by 6.8% in Italy and 6.2% in Germany.
In contrast, Poland was investing the least, at 2.2%. Latvia and Greece follow the countries investing the least, at 2.5% and 2.6%, respectively.
Last year, the European Commission unveiled the first-ever Affordable Housing Plan to tackle the bloc-wide housing crisis.
The plan includes measures to identify speculative behaviour and push for fairness in the residential housing market.
The EU will mobilise at least €11.5 billion from its multiannual budget to be added to the €43 billion already committed to social, affordable and sustainable housing. National and regional promotional banks and institutions are expected to invest €375 billion by 2029.
Unmet housing preferences are associated with a range of negative outcomes.
These include the inability to achieve independent living, the inability to follow a chosen career, negative impacts on mental health, and choosing to delay having children.