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Housing affordability and sustainability in the EU

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This analytical report is part of the European Construction Sector Observatory (ECSO) and aims to provide policy insights as well as highlight a set of evidence-based lessons learnt for policy-makers on how to support housing affordability and sustainability. Some of the key drivers and obstacles around housing affordability are identified and analysed and the relevant policy initiatives are also presented. Finally, the report offers a set of lessons learnt, based on the performed analysis.

 

Housing becomes more expensive across Europe, with house prince index rising in most of the European countries, particularly in urban areas. Growing population and urbanization trends create in turn a need for additional housing. Moreover, with an ageing EU building stock, considerations regarding the quality of living space also arise.

 

The report identifies and analyses some of the key drivers of housing affordability, ranging from sustainable urban planning policies, to economic factors. Governments are increasingly recognising the links between sustainability and housing, notably through the two following concepts: material sustainability and housing as a part of urban development.

 

Next to policy drivers, economic drivers, including monetary and fiscal measures, but also financial instruments play a key role in supporting the development of housing affordability.

 

EU governments have also put in place a number of financial instruments to foster housing affordability. These can take the form of affordable home ownership schemes (such as shared equity loans), targeting first time home-buyers and people, who do not have a substantial deposit saved for a market-rate mortgage. In parallel, while governments decreased their investments in social infrastructures, key players such as the European Investment Bank are actively funding housing affordability and sustainability.

 

Finally, another driver for housing affordability may come from the integration of digital technologies in the construction sector.