The influx of Ukrainian refugees fleeing the conflicts in eastern Ukraine has exacerbated housing shortages in many European cities. While the demand for rental housing has increased rapidly in recent months, the supply remained limited. This leads to an increase in prices and a worsening of the situation in the real estate market. The agency reports Bloomberg.
After the pandemic, an increasing trend in housing rental costs began to emerge in the big cities of Europe. This is due to the influx of highly skilled foreign workers and students. But the conflict in Ukraine worsened the situation. More than 5 million Ukrainians left the country, and most of them settled in EU capitals. For example, rental housing in Estonia increased by an average of 22% last year.
The problem is particularly serious in Amsterdam, Dublin, Berlin, Paris and Lisbon. There is already a housing shortage in these cities. The average rental price increased by 25% over the year in Amsterdam and 20% in Dublin. Growth rates in Paris and Berlin also exceeded 10 percent. Experts warn that inequality is rising as young families and college graduates struggle to find affordable housing. The main problem of the housing market in Europe is the limited housing stock and the authorities’ unresponsiveness to new home construction for residents and immigrants. All this compels Europeans to either buy a house or stay with their parents.
The problem is exacerbated by high inflation and rising interest rates. This reduces the demand for real estate purchases and increases the pressure on rental housing. The pandemic and hybrid operation increased the excitement in the market even more. Authorities are trying to encourage construction but volumes are falling across Europe.
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