In Zurich, apartment hunters bring wine and chocolates on tours to stand out from the crowd. In Amsterdam, university students spend months trying to find accommodation before term begins. In Dublin and Lisbon, young professionals give up and return to live with their parents.
In Europe’s biggest cities, tenants are facing a severe shortage of supply which is pushing prices to record highs. Rising mortgage rates have forced people to forgo property purchases, just as inflation is driving up the cost of building materials, hampering supply. Government policies and post-pandemic labor trends have pushed skilled foreign workers, who can often pay more than locals, to ParisDublin, Berlin and Lisbon, while the return of post-Covid students has boosted demand in places like London and Amsterdam.
The trend of rapidly rising rents since the pandemic is not unique to Europe, but it has been exacerbated on the continent by the relatively small size of cities and the higher concentration of historic and low-rise buildings. If governments fail to act, especially on the supply side, they risk dramatically increasing inequality, as those who cannot afford to buy property spend more of their income on housing.