Over the past 12 years, housing prices in the European Union have risen by just over 60% on average, while rents have increased by nearly 30%. Access to affordable housing is becoming increasingly difficult for Europeans, and Dan Jørgensen, the European Commissioner for Energy and Housing, has openly described the situation as a crisis and a state of emergency. This is why the European Commission has prepared an action plan that, for the first time, addresses the housing market at the EU-wide level.
“Many Europeans, seeing how severe the housing shortage is, would like this issue to be managed more centrally—by the European Commission or the European Parliament,” says Elżbieta Łukacijewska, a Member of the European Parliament from Poland’s Civic Coalition and the European People’s Party, in an interview with Newseria. “On the other hand, we operate within a free-market system where supply and demand shape prices. The reality is that housing is often inaccessible today for young people and for lower-income groups.”
A response to soaring prices and shortages
The European Commission’s plan is a response to rapidly rising purchase prices and rents across Europe, especially in large cities. The problem is compounded by a severe shortage of housing supply.
“Housing prices are indecently high. Subsidies for those who build homes do not necessarily make those homes cheaper,” Łukacijewska argues. “Demand exceeds supply, and that is why developers often set prices that seem completely detached from reality. For young families and young people, housing is simply out of reach. Policy should change—but toward those who build, not those who buy.”
She also points to qualitative shortcomings in new developments, including the lack of green spaces, roads, and supporting infrastructure, which are essential for making housing estates modern, accessible, and family-friendly.
According to the report “It’s Us. Poles on Real Estate. Q4 2025” published by Nieruchomosci-online.pl, eight out of ten respondents believe current property prices are high or very high. Seventy-one percent say that only a small number of people in their immediate surroundings can currently afford to buy a home or apartment.
“There should be a reasonable price per square meter, because today prices have reached tragic levels and no one can really explain why,” Łukacijewska says. “Perhaps less profit for those who build and more opportunities for those who want to buy—but I am fully aware this is not an easy topic. We do not live in a command economy or a socialist system. The market sets prices, but certain legislative proposals could certainly make this area more consumer-friendly and somewhat cheaper.”
The European Plan for Affordable Housing
Presented on 16 December, the European Plan for Affordable Housing focuses primarily on increasing the supply of affordable, sustainable, and high-quality homes. It proposes measures to create a more efficient and innovative construction and renovation sector, addressing the mismatch between housing supply and demand under a broader European housing strategy.
The plan calls for expanding housing supply through new construction and renovations, while also reducing administrative burdens, supporting innovation in construction, improving energy efficiency (and thus lowering utility bills), and mobilizing public and private investment.
According to Commission estimates, more than 2 million homes per year need to be built to meet current demand—around 650,000 more than are currently delivered annually. Implementing these additional investments would require approximately €153 billion per year.
“The debate and vote on housing in the European Parliament immediately raise expectations—especially among local governments—that there will be dedicated financial instruments to support cities and municipalities in building more affordable housing,” Łukacijewska notes. “It is not easy, but I am very pleased that the European Commission recognizes the housing problem and sets concrete targets for increasing supply, simplifying public procurement, and supporting member states.”
Financing and state aid reforms
The European Commission has already mobilized more than €43 billion for housing in the 2021–2027 financial framework, and plans to allocate an additional €10 billion in 2026–2027. It has also announced work on a new pan-European investment platform, in cooperation with the European Investment Bank, national and regional development banks, and other international financial institutions. By 2029, partner institutions are expected to mobilize up to €375 billion.
“In the current situation, it is hard to expect the creation of a completely new fund,” Łukacijewska says. “But the parliamentary debate gives hope that, especially where social housing is concerned, dedicated funding mechanisms will follow. We are still working on the next financial perspective, and the housing problem is serious in every member state.”
According to the European Commission, only 6–7% of housing stock in the EU consists of social housing. The proposed plan includes changes to EU state aid rules, making it easier for governments to financially support affordable and social housing.
Short-term rentals under scrutiny
The plan also addresses the impact of short-term rentals in areas experiencing housing stress. Commission data show that between 2019 and 2024, short-term rental prices rose by nearly 70%.
“It is a good idea to limit short-term rentals—one, two, or three nights—in large residential areas,” says Łukacijewska. “This is not only about access to housing, but also about the peace and quality of life of families living nearby. This problem is clearly visible across Europe.”
According to a study by the European Parliament, around 4 million short-term rental listings were available on digital platforms across the EU in 2025. Data from Eurostat show that the number of bookings made through these platforms reached a record 854 million overnight stays in 2024, an 18.8% increase year on year.
Together, these figures underscore the scale of Europe’s housing challenge—and explain why, for the first time, housing policy has moved firmly onto the EU’s common agenda.
