The surge of displacement and the displacement-driven demand for housing have intensified shortages in many European cities, where rental homes are scarce and prices keep climbing. The pressure on the real estate market has been reinforced by a mix of post-pandemic trends and a large inflow of new residents, with rents rising faster than incomes in several major markets. Analysts indicate that this squeeze is reshaping affordability and access to housing for families, students, and workers alike, and the trend is likely to have ripple effects on markets far beyond Europe.
After the pandemic, larger European cities began to see rents rise as more skilled foreign workers and international students arrived. The war in Ukraine amplified the situation, with millions of Ukrainians seeking housing across the European Union and drawing attention to the constraints of supply in major capitals. In markets like Amsterdam, Dublin, Berlin, Paris, and Lisbon, the shortage remains acute, with vacancy rates stubbornly low and construction activity not keeping pace with demand. Amsterdam experienced notable rent growth around a quarter of a year, while Dublin saw prices rise by about one-fifth. Paris and Berlin also posted double-digit gains. Such dynamics deepen concerns about inequality as younger families and recent graduates struggle to find affordable options in top cities.
The central challenge in Europe’s housing landscape continues to be a tight supply of homes and slow progress from authorities on new construction for residents and migrants. This structural bottleneck is pushing some households toward ownership in the hope of securing a stable place to live, while others consider living with relatives as a short-term solution in the face of scarce options. The situation is further intensified by ongoing inflation and higher borrowing costs, which dampen demand for purchases and push renters to shoulder higher monthly payments. The lingering effects of the pandemic, together with shifts toward hybrid work, have sustained elevated demand, while housing construction volumes across the region have not kept up. Government efforts to stimulate building are ongoing, but overall construction pace remains restrained as policy and funding hurdles persist.
Beyond Europe, the housing market in Russia is also undergoing shifts as shortages persist. Debates around introducing new mortgage types to improve access to housing signal a notable change in the domestic real estate environment. As these conversations unfold, the broader regional picture shows how credit conditions, policy choices, and supply constraints interact to shape affordability and access to homes in both mature and transitioning markets. The continuous tug-of-war between demand pressures and building activity underscores the importance of long-term planning, skilled labor pipelines, and urban development strategies that can adapt to shifting migration patterns and economic conditions while remaining affordable for residents and newcomers alike.