Nearly half of people on average income living in Europe can only afford to buy the equivalent of a one-bedroom apartment or studio flat, whilst 39% of Europeans cannot even afford to rent a property this size.
That's according to a new study, published today in the peer-reviewed Journal of Maps .
The data highlights the emerging crisis over affordable housing, with densely populated areas such as towns and cities worst affected.
The authors from TU Wien (Vienna), in Austria, used property and financial data from more than 30 European countries to map 'hotspots' where some homes are beyond the means of average earners. Areas around Paris, Berlin and Madrid are among the urban locations most affected by the housing affordability crisis.
The results show around two in five (44%) of Europe's urban population lives in a city where less than 50 square metres (around the size of a small one-bed flat or a studio apartment) are affordable on an average income.
Another key finding is that more than 70% of the European population live in regions where a thirty-year mortgage only buys up to 75 square metres, again based on an average income.
The maps also reveal that tourist areas are affected, with second homeowners and short-term renters pricing local people out of the market.
"Our study reveals pronounced hotspots of unaffordability," says lead author Franziska Sielker, a Professor of Urban and Regional Research, at the Institute of Spatial Planning at TU Vienna.
"It points to a substantial housing affordability crisis in the making. One that already disproportionately affects newcomers to the market as well as people who change their location frequently, for personal or professional reasons. This is the case in capital regions, major urban centres, coastal zones, and tourism-intensive alpine areas, alongside large rural supply gaps in rental markets."
The maps highlight an emerging affordability crisis, particularly when accounting for higher population density in the least affordable regions.
Affordable housing is an issue affecting many countries worldwide. In Europe, evidence suggests that house prices have risen faster than incomes for more than a decade.
For this study, the authors set out to establish how many square metres can be affordable on an average regional income.
The authors based their research on 22 million property listings gathered by the ESPON HOUSE4ALL project across 30 countries. They calculated the affordable floor area based on average regional incomes.
The data was then used to create maps to show the geography of housing affordability at a municipal level. The maps included homes that were owned and rented privately, and the authors analysed the relationships between the size of properties and the listed price.
Results showed that affordability challenges exist within nearly all countries investigated. However, some show a wide range of affordability levels, while housing is persistently out of reach for both newcomer buyers and renters on an average income. Portugal, Poland and the Netherlands are among countries that the study identified as highly unaffordable.
Urban centres are suffering most from high housing prices in relation to income. This is despite higher income levels compared to more rural areas and leads to what the authors describe as 'clearly visible spillovers' into neighbouring regions.
Therefore, the researchers say metropole regions require housing policy solutions the most urgently.
"The severity of the challenge is underestimated for most of the population. It's important to emphasize that the problem has two sides: the cost side and the income side. In order to close the gap, it is important to be aware of both," co-author Dr Selim Banabak, a University Assistant at TU Vienna, adds.
The study also shows that housing in tourist hotspots such as coastal and mountain regions is also less affordable than in other areas. The researchers say a policy option in these regions would be to intervene in short-term rental and second home markets.
A limitation of the paper is that it relies on approximate listing prices rather than actual sale prices, using broad municipal-level data that misses neighborhood-by-neighborhood differences. Too, it only looks at housing prices without considering other financial barriers like down payment requirements that also prevent people from buying homes.
