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Housing situation in Europe – What do countries do?

The housing crisis that has been experienced in Portugal is particularly noticeable in the disparity between property prices and workers' salaries, which are incompatible and make it unfeasible to acquire a house, whether by purchase or rent.

Although some measures have already been taken, there is still a need for changes to improve the housing situation in Portugal.

What is the situation in other European countries?

The problem of precarious housing is not exclusive to Portugal. In developed European countries, the situation has worsened over time. According to the European Union's Statistics Office, house prices have been increasing in recent years.

According to House Price Statistics, seven EU Member States recorded an annual house price increase of more than 10% in the fourth quarter of 2022.

Of note are Croatia (+17.3%), Estonia (+16.9%), Hungary (+16.5%) and Lithuania (+16.0%) which had the highest price increases , while Denmark (-6.5%), Sweden (-3.7%), Germany (-3.6%) and Finland (-2.3%) recorded the biggest price drops.

According to data from the European Parliament, when it comes to housing measures in Europe, the trends in various housing policies have been:

  • the creation of laws that require minimum rules with regard to housing;

  • imposition of rental limits in the private sector;

  • provision of social housing and consequent changes in the quality of life of inhabitants.

The housing policies of EU Member States are divided into four groups, the situation being as follows:

  1. Netherlands, Sweden and United Kingdom – Significant State intervention is a strong characteristic of these countries, whose governments spend more than 3% of their GDP on housing programs and have the largest social housing sectors in the European Union.

  2. Austria, Denmark, France and Germany – With fewer changes in the market, these countries have extensive sectors of private rental accommodation, with public spending on housing policy usually between 1 and 2% of GDP;

  3. Ireland, Italy, Belgium, Finland and Luxembourg – Each of these countries has a sizeable owner-occupied housing sector and a minimal social rented sector. The typical limit for public housing expenditure is 1% of GDP;

  4. Portugal, Spain and Greece – In these countries, the owner-occupied housing sector is significantly large, while the supply of social rental housing is scarce and (until recently) the supply of private rental housing of modest quality is decreasing. Less than 1% of GDP is spent by the government on housing policy.

The housing crisis has been problematic in several countries, particularly for young people, who are increasingly finding it difficult to purchase a home. With house prices increasingly high, young people find it difficult to leave their parents' home to start a new stage in their lives.

According to data from the European Union, in Portugal, Croatia, Slovakia, Greece and Bulgaria, young people leave their parents' home after the age of 30. In countries such as Estonia, Denmark, Finland and Sweden, young people leave home at the age of 23 or younger.

It was found that the highest average age for young people to leave the household was 33.6 years old and occurred in Portugal. In Spain, the reality is also not favorable for young people, with 80% between the ages of 18 and 34 unable to leave their parents' home. Given the circumstances, the Spanish government developed measures to help young people buy a house on credit, guaranteeing a percentage of 20% of the value of the loans.

It is crucial to recognize the importance of providing assistance to young people in Portugal so that they can obtain better financial conditions and purchase a home.

The housing crisis in Portugal and the financial difficulties that young people face not only have a significant impact on their own well-being, but also on the country's economic and social growth.

Read the full article here!

Source: Imovirtual


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