Locked out: Why young Europeans can't afford to buy homes
4 hours ago
- Homeownership rates among younger Europeans (e.g., born 1985-1990) have declined compared to older generations (e.g., born 1975) at the same age, with an 8-percentage-point gap between 1975 and 1985 cohorts by age 32.
- Key reasons for the decline include rising mortgage costs due to higher interest rates since 2021, house prices growing faster than incomes, slow wage growth, and higher tertiary education delaying labor market entry.
- Country-level data show significant drops in homeownership among people in their 30s from mid-1990s to late 2010s, with Ireland falling 28 points (81% to 53%), Greece 20 points (78% to 58%), UK 18 points (74% to 56%), and Spain 17 points (77% to 60%).
- Countries like Slovakia, Czechia, and Poland saw increases due to post-socialist privatization, where residents purchased flats at nominal prices, leading to near-universal homeownership.
- Experts note that beyond deposits, high house prices relative to incomes prevent borrowing enough to buy homes, even with good deposits, exacerbated by post-2008 credit restrictions and lower job stability.