The housing market is shafting young people right across Europe

New research has highlighted what young adults around the world have known for some time. The housing market is mostly wretched and impossible.

In many parts of Europe, rent alone can eat up almost all of a young person’s average income.

European Union agency Eurofound has published Foundational challenges: The housing struggles of Europe’s youth. It shows that young adults are disproportionately affected by soaring prices and rents.

Housing market gone haywire

Average EU sale prices and rents have increased by 55.4% and 26.7% respectively since 2010. Often this is far outpacing income growth. These averages mask even more severe problems in certain Member States, in larger cities and for younger people.

Eurofound’s research shows the particular impact on young people. They’re typically navigating lower and often more precarious employment earnings. And as a result, they’re finding it increasingly difficult to achieve independent adult living. It’s a struggle to rent or purchase a home in areas that also have good job opportunities.

The challenge is most acute in the rental sector. In Bulgaria, Ireland, Poland, Portugal, and Spain, and parts of Austria and Italy, renting a standard two-room apartment in many areas can cost more than 80% of a young adult’s median wage.

Crucially, in coastal areas of Portugal and Spain, and some regions of Bulgaria, this proportion climbs to over 100%. This effectively means a young person needs more than one full-time income just to secure a starter flat. The situation is worse in popular tourist destinations where the regular rental market competes with short-term lets and secondary housing, such as holiday homes.

Stifling choice

These financial pressures have real consequences on the decision to leave the parental home. The average age at which young adults leave the home continues to rise across several EU states. In Ireland, the proportion of 25–34-year-olds living with their parents jumped by 17 percentage points between 2018 and 2023, from 23% to 40%. Conversely, Hungary saw the largest drop in the same period (43% to 31%), followed by Czechia and Lithuania.

Students are also increasingly reliant on the family home. The share of students living with parents increased most dramatically in Ireland, from 73% in 2013 to 93% in 2023.

Beyond cost, young people who manage to achieve independent living face continued challenges. They spend notably more of their incomes on housing and are more likely to be overburdened with housing costs compared with older age groups. Yet they tend to live in poorer-quality dwellings. The report notes that across the EU, very little property available to rent in urban areas is affordable for a young person on a median wage.

The result is significant mismatches between actual and preferred living arrangements. Survey data from Czechia, the Netherlands, Spain, and Sweden show that far more young adults are living with friends, relatives, or parents than would choose to do so. This is leading to negative outcomes such as an inability to follow a chosen career path, delaying starting a family, and adverse impacts on mental health.

Possible solutions

With the European Commission recently giving housing its own dedicated portfolio, the report identifies several policy areas for action. It stresses the importance of understanding both quantitative data on housing challenges and qualitative data on young people’s preferences.

The report suggests that governments looking to balance the housing market can focus on increasing the stock of affordable starter homes rather than trying to use financial incentives for buyers and renters. It also calls for policymakers to treat property ownership and renting equally.

A critical untapped resource lies in the existing stock of vacant and underused buildings, which could be renovated to plug housing shortages. The report concludes that the housing crisis is impeding household formation and negatively impacting the well-being and future prospects of an entire generation.

Featured image via the Canary