Average house prices in the EU surged by 60% between 2015 and 2025, far ahead of household incomes. In many cities rents exceed 40% of average salaries, a level conventionally associated with financial strain. Housing has become the top public concern in Spain and the Netherlands; the EU's 27 national leaders are due to discuss the crisis at a summit in 2026. In 2024 the European Commission appointed a housing commissioner for the first time (shared with energy).
Public and social housing makes up 30% or more of the stock in the Netherlands and Vienna, but just 3.4% in Spain (EU average 8%). Germans tend to rent; southern and eastern Europeans tend to buy.
Spain has a shortfall of 700,000 homes, according to the Bank of Spain. Spain has 1.2m more households than in 2021, mainly because of immigration, yet builds fewer than 90,000 homes a year. Foreign buyers account for up to a fifth of purchases. Germany builds around half the 400,000 homes it needs each year; France is set to start 300,000 in 2026, about 220,000 short. A 2021 Spanish census found 3.8m empty homes (14% of the total), mostly in poor repair or in declining small towns.
In 2023 Pedro Sánchez's Spanish government approved a housing law allowing regional and local governments to cap rent increases. Catalonia's rent caps cut rents for existing tenants by 5% in two years but reduced new rental contracts by 10%, according to a study led by José García Montalvo of Pompeu Fabra university. The Netherlands greatly expanded private rent controls in 2024 under a centrist government; Amsterdam's social-housing waiting list now exceeds 11 years. Dutch and Spanish controls have prompted landlords to sell apartments, shrinking rental supply.
Portugal has cut income tax on rent for moderately priced homes from 25% to 10%. Mr Sánchez has offered a tax break for landlords who do not raise rents, and launched a €7bn four-year public-housing plan. In Catalonia getting building permits can take 12 years. Stockholm's public-housing projects use standardised modules to cut costs. Portugal plans to cut VAT on construction of affordable homes from 23% to 6%. In Germany, spending on housing benefits for individuals has exceeded spending on new housing projects every year since 2005, and is now roughly four times higher.
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