Inflation in Europe may be showing signs of easing from historic highs reached last year, but the cost of living continues to weigh on households and is the biggest concern for more than 90% of Europeans.
The official figures are revealing. Housing, water, electricity, natural gas and other fuels accounted for the largest share of household consumption in EU – 24.1%.Next come food and non-alcoholic beverages – 13.6% and transport – 12.5%.And, as Euronews notes, while the ranking of these categories has remained stable over the past 20 years, their relative “weight” has changed over time. Comparing shares from 2002 to 2022, the most significant change occurred in the housing sector, which increased from 21.1% to 24.1%.This represents an increase of 3 percentage points (pp) over two decades.
This means that if a household's total expenditure in 2002 was €1,000, it would have spent €211 on housing.By 2022, this amount was 241 euros. This increase highlights The financial burden of basic living expenses for European householdslikely driven by rising housing prices and energy costs over the past two decades. If you look at the percentage change, then the share of health care expenditure increased by 22% compared to the increase in housing costs (14%). However, since the share of housing costs is much larger, the overall effect of the increase in housing costs is much greater.
Starting from just over 20% in the early 2000s, the share of household expenditure on housing and communal services has been steadily increasingpeaking at almost 25% in 2013. This period saw the most significant growth. After a slight decline during the Covid-19 pandemic, this share has recovered, reaching a record high of 25.6% in 2020. The overall increase in housing and utility costs over the past two decades shows that these expenses are becoming an increasingly important part of family budgets, reflecting wider economic pressures and changes in the cost of living across the EU.
In some countries, growth was more pronounced, exceeding 5%.Between 2002 and 2022, Ireland saw the greatest growth, with a staggering 7.1% growth, followed by Spain and Italy with growth of 6.3% and 5.4% respectively. Growth exceeded 4% in 10 EU countries, highlighting the broad growth trend across the region.In Greece, the corresponding percentage, according to Eurostat, is 1.9%.
Several Eastern European countries, as well as Sweden and the UK, have seen reduction in the share of housing expenses.Romania, in particular, recorded the most significant decline, down 4.1%, while Bosnia and Herzegovina and Serbia also saw significant declines. Housing expenditure as a percentage of total household expenditure varies considerably across Europe.In 2022, Slovakia became the leader: more than 30% of household expenditure was spent on housing.It is followed by Finland and Denmark with shares of 29.6% and 29.1% respectively.In Greece, the corresponding percentage is 19.1. According to Euronews, these figures show that Northern and Central European countries are facing significant financial pressure related to housing and utilities, likely due to higher energy costs or more expensive home purchases. In contrast, in Southern and Eastern European countries such as Montenegro, Turkey and Albania, the shares are much lower: Montenegro accounts for only 11.6%, while Turkey and Albania account for 12.4% and 12.5% respectively.
Rising Property Prices and the Housing Crisis Europe’s housing crisis, decades in the making, is being felt from the Netherlands to Portugal, Greece to Germany and the UK. Prices and rents have soared, affordability has fallen and housing has become a political issue. Between 2010 and 2022, house prices in the 27-member bloc jumped 47%, according to Eurostat’s 2023 report. In some countries, they have almost tripled: in Estonia, the increase was 192%. Only in two EU member states, Italy and Cyprus, prices fell.
Meanwhile Rents have increased by an average of 18% over the same period.increasing in all EU Member States except Greece (where it rose by 37% since 2018). The largest increases occurred in Lithuania (+144%) and Ireland (+84%).
“Marshall Plan” in Europe The lack of affordable housing and the rising cost of living have recently been at the centre of national and European election campaigns. It is no coincidence that Commission President Ursula von der Leyen made specific references to them in her speech to the European Parliament when she sought re-election last month.
«“People are struggling to find affordable housing,” the president of the EU executive said at a plenary session in mid-July in Strasbourg. “I want this commission to support people where it matters most, and if it matters to Europeans, it matters to Europe” she said.
In her guidelines for the next European Commission, von der Leyen stressed the urgency of solving the housing crisis by proposing the first European plan for affordable housing and the appointment of a commissioner responsible for a specific policy area, as the Socialists demanded, as a condition for supporting her for a second term.
Today, there is a significant shortage of investment in social and affordable housing.
Recall that von der Leyen gave member states until August 30 to nominate two candidates for the College of Commissioners for the next five-year term. Only then will she decide who will lead which portfolio and what powers they will have.
Disposable income The proportion of households paying more than 40% of their disposable income for housing has increased. In Germany, where just over half the population lives in rented housing (one of the highest rates in the EU), the Federal Statistical Office estimates that one in five households spent at least two-fifths of his net income. As for Greece, it ranks a dismal first in Europe, with household housing costs exceeding 40% of disposable income.
We and our partners use information collected through cookies and similar technologies to improve your experience on our site, analyse how you use it and for marketing purposes. You can find out more in our privacy policy, and manage your consent at any time.
We and our partners use information collected through cookies and similar technologies to improve your experience on our site, analyse how you use it and for marketing purposes. Because we respect your right to privacy, you can choose not to allow some types of cookies. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer. In some cases, data obtained from cookies is shared with third parties for analytics or marketing reasons. You can exercise your right to opt-out of that sharing at any time by disabling cookies.
These cookies and scripts are necessary for the website to function and cannot be switched off. They are usually only set in response to actions made by you which amount to a request for services, suchas setting your privacy preferences, logging in or filling in forms. You can set your browser to block oralert you about these cookies, but some parts of the site will not then work. These cookies do notstore any personally identifiable information.
Analytics
These cookies and scripts allow us to count visits and traffic sources, so we can measure and improve the performance of our site. They help us know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies and scripts, we will not know when you have visited our site.
Embedded Videos
These cookies and scripts may be set through our site by external video hosting services likeYouTube or Vimeo. They may be used to deliver video content on our website. It’s possible for the video provider to build a profile of your interests and show you relevant adverts on this or other websites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies or scripts it is possible that embedded video will not function as expected.
Google Fonts
Google Fonts is a font embedding service library. Google Fonts are stored on Google's CDN. The Google Fonts API is designed to limit the collection, storage, and use of end-user data to only what is needed to serve fonts efficiently. Use of Google Fonts API is unauthenticated. No cookies are sent by website visitors to the Google Fonts API. Requests to the Google Fonts API are made to resource-specific domains, such as fonts.googleapis.com or fonts.gstatic.com. This means your font requests are separate from and don't contain any credentials you send to google.com while using other Google services that are authenticated, such as Gmail.
Marketing
These cookies and scripts may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies and scripts, you will experience less targeted advertising.
More Stories
140 new 'green' buses are running in Athens
Medicines: rising costs for citizens
BRICS and G7: New Energy Race and Struggle for Resources