From Lisbon to Berlin, a generation is locked out of homeownership. The political fallout is only beginning.
In Lisbon, a one-bedroom apartment costs 65% of the median salary. In Amsterdam, the average wait for social housing is 14 years. In Berlin, rents have risen 40% in five years despite a constitutional rent cap that courts struck down. Across Europe, a generation is discovering that the continent's celebrated quality of life has a price tag they cannot afford.
Housing affordability has displaced immigration as the top economic concern in 19 of 27 EU member states, according to a 2025 Eurobarometer survey. The crisis is reshaping politics. In Portugal, the far-right Chega party tripled its vote share in 2024 on a platform that linked housing costs to immigration. In the Netherlands, the housing shortage was a central issue in the coalition formation that brought the PVV to power.
The roots of Europe's housing crisis lie in decisions made decades ago. From the 1990s onwards, most European governments cut social housing construction, deregulated rental markets, and treated housing as an asset class rather than a social good. The financialisation of housing — the entry of institutional investors, short-term rental platforms, and speculative buyers — accelerated after 2008.
The numbers tell the story. In 1980, the EU's largest economies built an average of 400,000 social housing units per year. By 2020, that number had fallen to 60,000. Meanwhile, Europe's population grew by 50 million and urbanisation concentrated demand in precisely the cities where supply was most constrained.
We stopped building social housing and then acted surprised when housing became unaffordable. This is not a market failure. It is a policy choice.