Filenews 3 August 2025 - by Theano Thiopoulou
People across Europe are struggling to find an affordable place to live, work, raise their families and go about their daily lives. A safe and stable home is a basic need, however in many countries there is a growing housing crisis, with many different faces.
Affordable housing has become a widespread and urgent issue across Europe, which is why affordable housing is a top priority for the European Commission in order to ensure European social justice.
This is what the European Commission says, which is preparing a comprehensive plan for affordable housing, aimed at addressing the issue of the housing crisis that affects all EU countries. The public consultation on the plan has started on 11 July and is expected to conclude on 17 October, with the Commission expecting to receive proposals from citizens and institutions on a range of housing issues, with a key priority being to increase the supply of affordable properties. The consultation is expected to involve owners' and tenants' organisations, construction companies, academics and banks, among others.
The European Commission stresses that rising house prices and rents, increased costs for utilities and renovations are putting pressure on an increasing number of households, especially in large cities, tourist destinations and other areas with high demand for housing.
It notes that disadvantaged groups and low-income families are hit even harder, facing more difficulties in accessing housing and an increased risk of becoming homeless. The cost of housing, the European Commission points out, also poses significant challenges for families, young people and those working in key sectors such as healthcare and education.
Unaffordable housing makes it difficult for people to move to study or work, which undermines Europe's competitiveness.
Huge rent increase
The key indicators show how the real estate sector is shaping up in Europe, according to data presented by the European Commission. The first element is the inflation-adjusted house prices, which have increased by more than 20% in 2024 compared to 2015.
Rents in major cities have risen by up to 48% for a 1-bedroom apartment between 2014 and 2024. Total investment in residential buildings, adjusted for inflation, fell by 6% from 2022 to 2024. 17% of the population lives in overcrowded homes. Building permits for residential buildings have decreased by more than 20% since 2021. Homelessness affects all Member States and has increased significantly over the last decade
EU priorities
According to the data provided by the European Commission, the areas where the EU can add value are:
• Creation of a pan-European investment platform for affordable and sustainable housing
• Channelling liquidity into the housing market and doubling of planned cohesion policy investments in affordable housing
• Revise state aid rules to facilitate support for affordable housing by Member States.
• Development of a European housing strategy to support housing supply
• Supporting cities and regions to address the inefficient use of empty and under-used buildings
• Addressing systemic issues with short-term accommodation leases and analysing the impact of speculation on the housing sector
• Reducing energy bills and reducing energy poverty to make homes affordable, dignified and sustainable.
• Through the Affordable Housing Dialogue, further areas where there could be European added value will be identified.
A big problem in Cyprus as well
The problem of obtaining affordable housing is a pan-European phenomenon and many young people are turning to renting.
Property prices in Cyprus vary depending on the area, the type of property and its condition. Generally, apartment sizes range from 1,616 sq.m. to 1,903 sq.m., while house sizes range from 1,653 sq.m. to 1,938 sq.m.
Recently, Landbank Analytics provided data for the first quarter of 2025, based on sales filed with the Land Registry.
The largest increase in houses is recorded in Nicosia, with an average sale price of €412,000, increased by 35.5% compared to the same period last year. It is clarified that if the sale of a house worth €2.7 million is excluded. The increase is limited to 3%.
Apartments remained almost stable in Nicosia, with an average price of €191,000. In Limassol, the average value of apartments increased by 12.4%, reaching €372,000, while average house prices fell by 12.4% to €389,000.
In Paphos, the average sale value of houses increased by 16.9%, to €693,000, while in apartments it decreased by 10.3% to €287,000. On the contrary, in Famagusta, there was a drop in both houses (to €300,000) and apartments (to €178,000).
In general, costs tend to be higher in large cities and areas with a high standard of living, and tenants often face a higher housing burden than landlords.
According to Eurostat data, house prices in Europe rose by 5.7% in the first quarter of 2025 year-on-year and by 1.4% quarter-on-quarter. Rents increased by 3.2% and 0.9% over the same period. It is no coincidence that in Cyprus too, concerns are regularly expressed about the level of rents – which vary depending on the province – but also about the prices that sales prices per square meter have reached.
In 2026, the proposal from the European Commission
The issue of access to affordable housing is not limited to lower-income groups.
It is currently also affecting a wider segment of society due to various factors, such as growing demand in urban areas, rising housing costs, housing supply shortages, aging building stock, regional economic inequalities, as well as tourism and short-term rentals.
To address the acute housing crisis, the Commission has appointed Dan Jorgensen as Commissioner for Housing and set up a Task Force on Affordable Housing, which coordinates the Commission's work on the issue.
In 2026, the Commission will present a proposal for a European Affordable Housing Plan, complementing the policies and initiatives of Member States and regional and local authorities in the field of housing, while respecting the principle of subsidiarity in the housing sector and taking into account the different interests of the many stakeholders.
Among the key initiatives envisaged, the Commission will revise its state aid rules, delivering on its promise to facilitate the financing of energy efficiency and affordable housing.
