The European Commission has admitted to “closely monitoring” – with a view to wanting to respond to – the housing crisis in Europe, with a community plan to be announced in December, at a time when Portugal is experiencing some of the highest rises in house prices.
“With regard to housing, it is a problem in many EU member states and something we are monitoring closely, as we are now working on how to address these housing issues at EU level as well,” European Commissioner for the Economy Valdis Dombrovskis told reporters in Brussels today.
A European housing package is due to be presented on December 16, including an EU plan for affordable housing, a proposal to revise state aid rules for services of general economic interest, a new European Bauhaus programme and a new strategy for housing construction.
The autumn forecasts, released today in Brussels, indicate that “house prices in the EU continued to rise, consolidating the recovery that began in 2024”.
In the second quarter of 2025, house prices in the EU were 5.4% above the level recorded a year earlier (5.1% in the euro area), following quarterly increases of 1.4% in the first quarter of 2025 and 1.6% in the second quarter of 2025.
This price growth was most pronounced in southern and eastern Europe.
Portugal is one of the countries that has been recording double-digit annual growth rates, driven by strong demand and limited supply.
“Pressures on affordability remain high, as house prices have risen faster than household incomes in many countries, especially in urban centres,” the commission warns.
“Supply constraints remain a key factor in housing market dynamics”, while “building permits and completed dwellings remain at historically low levels”.
Structural barriers, high construction costs and regulatory obstacles continue to limit new supply, pushing prices up, says the EU executive, recognising that these constraints are likely to remain throughout 2026-2027.
Due to the acute housing crisis in the EU, the commission will present, by the end of 2025, a European Plan for Affordable Housing aimed at complementing housing policies at national, regional and local level, while maintaining the principle of subsidiarity, as this is a competence of member states.
The plan will include funding, state aid and limits on short-term rental accommodation.
As has been explained for a number of years, the European Union is facing a housing crisis – particularly acute in Portugal – where property prices and rents have risen beyond the means of ‘normal working people’, and particularly beyond the means of young people.
It is estimated that in the EU, more than one in four people aged between 15 and 29 live in overcrowded conditions, with most young Europeans leaving their parents’ home around or after the age of 30 because they simply cannot afford a home of their own.
In 2023, around one in 10 Europeans spent 40% or more of their income on housing and related costs. This will undoubtedly have risen, in spite of there being no more current data at this point.
Source material: LUSA
