Numerous reports on the affordability of housing in the EU have been published in recent years. They indicate an alarming development. Housing in large cities in Europe is no longer affordable for broad groups of society.

“Availability and affordability of decent housing has become an important economic and social concern in the European Union (EU). This has accelerated in recent years, as housing price increases in metropolitan regions have often outpaced wage increases. Young people and newcomers to cities are especially affected, while older generations owning homes in prime locations have benefited from the rise in the value of these assets.”
(World Bank 2018, 14).

“The housing question is at the heart of the growing social divide that we observe in most European societies over the last years. While accessing and sustaining decent accommodation is primarily an issue for those living on low incomes, more and more people are affected by the lack of affordable housing, particularly in big cities, and make their voice heard putting housing de facto on the political agenda.” (Housing Europe 2019, 6)

“Achieving a middle class lifestyle has thus become more difficult than in the past because of the strong rise in the prices of housing and other large middle-class consumption items. Housing, in particular, is key: at around one-third of disposable income, it constitutes the largest expenditure item for middle-income household – up from around a quarter in the 1990s.” (OECD 2019)

No definition for “what is affordable housing?”

But what does affordable housing actually mean? Is there a clear definition for “affordable”? No, there is not any Europe-wide, official definition for that. There only exists a so called housing cost overburden rate, which is an official indicator defined by EUROSTAT as the percentage of the population living in a household where the total housing costs (including rent or mortgage, costs of utilities like water, electricity, gas and heating, net of housing allowances) represent more than 40% of the total disposable household income (net of housing allowances). Critics say that this threshold 40% is too high.

If we want to compare house prices, expenditures on housing, housing cost overburden rate etc. between European Member States, we have to look  at EUROSTAT.

How many Europeans are overburdened by housing costs?

9,6 % of all Europeans (42,8 m) are overburdened by housing costs, 36,1 % of the Europeans at risk of poverty.

39.5% of the Greeks,

17.9 % of the Bulgarians

14.7%  of the Danes,

14.2 % of the Germans are overburdened by housing costs.

Especially tenants are affected by housing cost overburden.

Tenant, rent at market price: 25.1 %, tenant, rent at reduced price or free: 10.2 %

Owner, with mortgage or loan: 4.4 %, owner, no mortgage or housing loan: 5.5 %

Source: EUROSTAT, EU SILC 2018, EU 27

20.4 % is the share of housing costs in disposable household income

  • Single-households 31.6 %
  • Single parents 30.5%
  • Pensioners (65 years or over)  28.6 %

Source: EUROSTAT, EU SILC 2018, EU 27

The highest household expenses are incurred for...?

‘Housing, water, electricity, gas and other fuels’, almost a quarter of EU household expenditure (24.0 %) in 2018. Source: EUROSTAT