This Just the Facts is largely informed by Eurofound’s 2023 report, titled “Unaffordable and inadequate housing in Europe”, as well as Eurofound’s Dublin Briefing on 7 November with Hans Dubois.
On 29 November 2024, the Irish public headed to the polls to vote in a General Election and elect 174 TDs to the Dáil for the next five years. But what was the issue at the top of voters’ minds as they cast their ballot?
Housing.
Is Ireland’s housing situation an outlier in Europe? This Just the Facts dives into the issue of housing across the European Union and looks at whether Member States are all “under one roof” when it comes to the housing crisis.
Ireland state of play
According to the Irish Times/RTÉ/TG4/TCD exit poll carried out by Ipsos B&A, the most important issue for voters in the 2024 General Election was housing and homelessness. Similarly, statistics from face-to-face fieldwork has shown that housing was the second highest topic at 44% (after cost of living) which encouraged voters to vote in the June European Parliament elections. This figure was over four times the EU average which was 10%.
According to the Central Statistics Office (CSO), Irish residential property prices (RPPI) increased by 8.6% between June 2023 and June 2024 and the median price for a dwelling during this period was €337,000, with the highest (€630,000) recorded in Dún Laoghaire-Rathdown and the lowest (€169,000) recorded in Longford. The end of the Celtic Tiger and economic crash of 2008 marked the downturn of property prices. Since then, housing prices have slowly climbed and in some parts of Ireland have even exceeded the peak prices of the Celtic Tiger years.
In its interactive tool “Young Europeans”, Eurostat figures from 2023 reported that 56.2% of Irish adults aged between 25 and 29 are still living at home, the ninth highest after southern and eastern European countries such as Croatia, Italy, Slovakia, Greece, Spain, Portugal, Poland and Bulgaria. These figures are also in sharp contrast to rates in other European countries such as Denmark (4.5%), Finland (5.2%), Sweden (9.7%) and the Netherlands (18%). The EU average is 41.7%. According to the National Youth Council of Ireland’s 2024 report, nearly half (48%) of 18-29 year olds are dissatisfied with their current home.
The one EU-level statistic regarding housing situations where Ireland is considered an outlier is in terms of the type of housing (house, flat, or other) that people live in. In 2023, 89.7% (EU average is 51.7%) of people lived in houses and only 10.2% lived in flats (EU average is 47.7%). Other countries where houses are the primary dwelling type are the Netherlands and Belgium. In comparison, in Spain 64.7% of people live in flats and 34.4% of people live in houses.
EU state of play
According to Eurofound’s senior research manager in social policies, Hans Dubois, the “housing crisis impacts almost everyone”, whether that be homeowners and renters; rural and urban dwellers; or young and old citizens. Across Europe, housing costs have spiralled compared with a few years ago. Since 2016, in particular, house prices and rents have increased faster than disposable income.
If we look to housing problems across Europe today, it is clear that there are big differences in the general landscape across EU Member States. On the other hand, there are also some similarities.
However, is important to state that housing affordability is an issue in all EU countries. Where the differences among problems begin to emerge is between population groups in Member States, rather than differences between Member States themselves. For example, those with low and high incomes; those who are new to the housing market and those who are homeowners; those living in urban areas and those who are not; those with and without access to social housing; and those with flexible and those with fixed rate mortgages.
Home ownership
Many problems relate to the issue of home ownership and whether you own or rent a home. Based on 2020 figures, 7 out of 10 people in the EU own the home where they live and 3 in 10 rent the accommodation where they live. In all EU Member States homeownership is more common than renting (except in Germany where 50.4% of the population are renting). However, the rates of home ownership across the EU varies drastically, and even fluctuates considerably across the regions of individual Member States.
The countries with the highest home ownership rates are post-communist or southern European countries, for example Romania, Croatia and Slovakia. Many of these countries also have the highest population percentages that own their home without a mortgage. However, it is important to look at the broader picture. Even amongst those who own their home without a mortgage, many struggle to meet the costs of running their home, for example energy bills, and are at risk of poverty.
In Member States where more people own their home with a mortgage, for example in the Netherlands (61%) and Sweden (52%), problems differ between Member States but include issues such as vulnerabilities to interest rate increases.
Overall, homeownership decreased by 1%, from a peak of 71% in 2012 to 70% in 2020. In certain countries such as Denmark, Cyprus, Spain, Lithuania, Finland and Bulgaria homeownership decreased by more than 3%. Although this perhaps does not sound like a significant decrease, such a change in figures for a less than ten-year period is large and when investigated more closely, this figure is particularly significant for young people.
Young people
Young people and low-income groups are disproportionately affected by the housing crisis across Europe. Between 2010 and 2019, the proportion of young people aged 20–29 who are renting increased from 66% to 68%, and among people aged 30–39, the proportion renting increased from 38% to 45%. As mentioned above, more young people are likely to live longer with their parents. The age at which at least 50% of people in the EU were living outside their parents’ home increased from 26 to 28 between 2007 and 2019. It is also more common for 25–34-year-olds who are either unemployed or studying to live at home in comparison with those who are in employment. However, between 2017 and 2022, the share of people aged 25-34 in employment and living with their parents increased by 3% across the EU and 6% in countries such as Ireland, Spain, Greece, Italy, Hungary and Portugal.
There are considerable differences between Member States on this topic, some of which could be accounted for by cultural factors – i.e. intergenerational living being more common in some EU countries. However, rapid changes over time as seen in the diagram below cannot be explained solely by culture (see in particular Spain, Italy and Greece). The social consequences for European society at large for young people living longer at home include the postponement of life decisions such as whether to have a family, leading to impacts on European demography. It can also have effects on social cohesion, create intergenerational inequality, and could have an impact on retirement age. Additionally, it affects young people’s quality of life and wellbeing as a young person’s living situation does not match their preferences.
What are the main problems?
According to Eurofound’s 2023 report, there are four main housing problems:
Exclusion
There are two main groups who face difficulties accessing the housing market: people who are homeless and young adults living with their parents who cannot afford independent housing. There is a lack of comparable EU-level statistics on homelessness. However, 2024 statistics compiled by Feantsa and Fondation Abbé Pierre estimate that there are 1,287,000 people in the EU sleeping rough, staying in night shelters and in temporary accommodation.
Insecurity
There are also population groups who, while they do have access to housing, still face housing insecurity. During 2020 and 2020, on average, 3% of the EU’s population considered it “very likely” (the highest was 7% in Cyprus) and another 3% “rather likely” (the highest again was Cyprus at 7%) that they would need to leave their homes within the next three months on account of not being able to afford it. These figures are also proportionately higher among private renters (46%) who appear to be most impacted by housing insecurity.
Interestingly, there was not found to be a link between a country’s homeownership rate and its rate of housing insecurity. This means that just because a country has a larger proportion of its population renting, it does not mean that this population perceives more housing insecurity and vice versa. However, there is a correlation between an increase in education levels and a decrease in housing insecurity. In some Member States, other factors also contribute to housing insecurity. For example, in Bulgaria ethnicity has been cited as a vulnerability to housing insecurity (for example, 60% of Roma people are at risk of housing insecurity).
Housing costs
As stated above, housing costs across the EU have soared over the last number of years. Not only that, but the cost of energy utilities and essentially keeping a house warm also increased in many instances. Those spending 40% of their income or more on housing and utility costs were more likely (three in five) to report that they had difficulty making ends meet. Although, it is true that not all of those who are experiencing an overburden of housing costs are experiencing financial strain, it is clear that those who are experiencing major strain include low-income households with children.
Inadequacy
As mentioned previously, there are major differences among European countries when it comes to what types of dwellings people live in. This is important because it means that each EU Member State faces different challenges when it comes to housing adequacy, i.e. those who live in a flat and in a house may not necessarily experience the same issues.
Housing adequacy essentially means that, although a person may have access to housing, it does not mean that they live in a home which is of high quality or adequate to their needs (for example, social, employment or service needs). Adequacy can also be subjective as not everyone perceives problems the same way and the quality of housing can be measured in many ways.
Some EU statistics look at whether people live in an overcrowded home. In 2023, 16.8% of the EU’s population were reported to be living in an overcrowded home, with the highest observed in Latvia (40.9%) and Romania (40%) and the lowest in Cyprus (2.2%), Malta (2.4%) and the Netherlands (3.8%).
In 2022, Eurofound asked citizens by survey what the most problematic issues were associated with their accommodation. The top issue that citizens found to be inadequate in their dwelling was poor insulation and energy efficiency. However, all problems cited in the survey (including other issues such as no access to a balcony or garden or noise from neighbours etc.) were found to be more common for 18–34-year-olds, lower income groups, and private tenants. Access to public transport was also found to problematic for 25% of the EU population, and in particular (56%) for those living in the countryside.
The role of the EU
The right to housing is included in the United Nations Universal Declaration of Human Rights (UDHR). Housing and assistance for the homeless is also embedded into the European Pillar of Social Rights (Chapter III), which informs and affirms EU action in social policy.
The EU has no direct competency or power in housing policy. This means that any legislation directly related to housing remains in the hands of the EU’s Member States. For example, the EU can provide recommendations, data-collection and best-practice exchange but it cannot directly fund a housing project in an EU country. However, this does not mean that the EU legislation and policy does not have an indirect impact on housing.
Housing provision in the EU is impacted by EU fiscal, competition and State aid rules. Social housing is considered a service of general economic interest (SGEI) and therefore must respect EU competition rules. The Renovation Wave strategy aims to improve building energy efficiency and boost living-standards across the EU, and includes an affordable housing initiative. The EU platform on combatting homelessness aims to promote the use of EU funding by Member States to support inclusive policy measures aimed at combatting homelessness.
Additionally, according to the Commission’s 2023 report on the allocation European structural and investment funds (ESI), between 2014 and 2020, over 550,000 households benefitted from improved energy performance conditions linked to ESI funds. Housing policies integrated with other strategies such as urban regeneration are also compatible with EU funding programmes. Another co-funded achievement from ESI funds between 2014-2020 included EU projects involved in the building of 28,000 renovated housing units.
There is now more impetus to address Europe’s housing crisis at the EU level. In her speech to the European Parliament in Strasbourg in July, before her re-election as European Commission President in July, Ursula von der Leyen confirmed that housing would be a priority issue for the next (2024-2029) mandate. For the first time, there will be an EU Commissioner for Energy and Housing; Dan Jørgensen. It will be important that this Commissioner cooperates with other EU Commissioners, as another part of the housing crisis relates to access to services and social benefits. This will primarily be the Executive Vice-President for People, Skills and Preparedness, Roxana Mînzatu, who will be responsible for the European Pillar on Social Rights. Some plans that were mentioned in President von der Leyen’s Political Guidelines include, a revision of state aid rules, the proposal of a “European Affordable Housing Plan”, as well as a pan-European investment platform for affordable and sustainable housing backed by the European Investment Bank.
What can be done on the national level?
Exclusion
People who are homeless represent just 0.2% of the EU’s population and therefore should be an issue that is solvable. When investigated under policy evaluations, Housing-First schemes, which are in many cases financed by EU funds, are proven to work. Finland’s PAAVO and AUNE programmes are a good example of this as during recent years it is the only EU country with decreasing numbers on homelessness. About three quarters of Member States have Housing-First inspired schemes in place, or in a pilot phase (none were present in Cyprus, Estonia, Greece, Latvia, Lithuania, Malta or Romania). However, some of these initiatives remain small in scale, and should be scaled up. Read more about examples of Housing First-inspired policies across EU Member States, including Ireland, here (page 28).
Insecurity
In terms of housing security, one area which could be tackled is the prevention of evictions. Eurofound argues that “in order to prevent evections or facilitate moves to affordable homes, support needs to be triggered automatically when an eviction notice is issued”. This is the case in countries such as Sweden. However, it is ideally better to prevent evictions altogether and therefore support should be offered at an earlier stage, as is prevalent in cities such as Vienna and Amsterdam, when utility or rent arrears first emerge. In the Netherlands, evictions decreased from 3,000 in 2018 to 1,720 in 2020.
Housing costs
Monetary support in the form of subsidies for renters and initiatives such as tax breaks, first time buyer supports for owners, for example, are quite common and can help citizens with their housing costs. However, almost all programmes have an income threshold which can lead to problems for cohorts that are slightly over the threshold to avail of these supports. In countries such as Poland, the Netherlands and Germany these subsidies are calculated on a gradual threshold. In most cases, Additionally, rent subsidies in some countries (Hungary, Czechia, Estonia and Finland, for example) take into account utility costs too and therefore are somewhat more responsive to the needs of the renter.
There are also big differences in Member States when it comes to the proportion of the population with variable interest rates and not (high proportion in Poland and very low proportion in Belgium). In terms of addressing housing costs, financial security is paramount, especially when it comes to variable interest rates on mortgages and policymakers should pay attention this.
The percentage of social housing across EU Member States differs considerably. Ireland has a total of 9% of total social housing in its housing stock (figures from 2021). In comparison, social housing makes up 29% of the Netherlands’ housing stock, 24% of Austria’s, and 17% of France’s. Like rent subsidies, in many instances tenants of social housing need to leave once their income surpasses a certain threshold. In Flanders, Belgium, this process is a bit more gradual where social tenants must leave if after nine years, their income surpasses the threshold by 25%. It is recommended that any disincentives to increase income be addressed.
Inadequacy
It goes without saying that increasing housing supply is paramount by building, renovating and reducing vacant dwellings. When we look to addressing housing inadequacy, there is a tendency to immediately thinks of building or renovating more houses. However, it is important to look beyond the building of homes and ensure that any homes built are adequately serviced and connected by public transport. EU green transition funds should be used to finance the energy efficiency of homes. However, these funds must be used in such a way that their benefits are targeted to lower income groups and those impacted the most (private tenants and those in social housing).