Why young Europeans are struggling to get on the property ladder

Euronews Business examines how homeownership rates among younger Europeans have changed compared with previous generations, and what is driving the shift.

Europe is facing a serious housing crisis and young people are feeling the strain. While many dream of owning their own home, it is becoming increasingly difficult to do so. Younger generations in Europe have lower homeownership rates than earlier generations, according to the OECD.

So, how have homeownership rates changed across generations? Why is homeownership falling among young Europeans? And in which countries are young people struggling the most?

According to the ‘Mapping trends and gaps in household wealth across OECD countries’ report, younger generations in Europe are finding it increasingly difficult to reach the same homeownership levels as previous generations did at the same age.

The OECD data covers the average across 20 EU countries. For example, 60% of people born around 1975 owned a home by age 32. This fell to 58% for the 1980 birth cohort and to 52% for those born in 1985. That means there is an 8 percentage point gap between the 1975 and 1985 cohorts.

Similarly, by age 29, the homeownership rate was 52% among the 1980 cohort, before gradually declining to 45% and 41% among the 1985 and 1990 cohorts, respectively.

The difference is also clear at younger ages among more recent cohorts. For example, by age 23, 32% of the 1985 cohort owned a home, compared with 26% among people born in 1990.

Among earlier cohorts, homeownership rates were much closer. By age 44, 68% of the 1965 cohort owned a home, compared with 69% for the 1970 cohort and 68% for the 1975 cohort.

Likewise, 70% of people born in 1960 owned a home by age 46. The figure was 71% among the 1965 cohort and 70% for the 1970 cohort.

Reasons behind homeownership decline

“A number of interconnected reasons are likely to be at play,” OECD experts told Euronews Business. They emphasised that access to mortgage credit has become more challenging, as rising interest rates since 2021 have increased borrowing costs. House prices have also grown faster than incomes in many OECD countries.

“Relatively slow wage growth has further reduced affordability, making it more difficult for first-time buyers to accumulate down payments and qualify for mortgages,” they said.

OECD analysts also pointed out that higher tertiary education enrolment may have delayed labour market entry and the transition to independent living.

Homeownership: Mid-1990s vs late 2010s

More recent country-level data also show that this trend continues in most European countries. According to the OECD Employment Outlook 2025 report, the share of people in their 30s who own their main residence dropped in around two-thirds of countries when comparing the mid-1990s with the most recent year available.

“Younger generations are less likely to own a home than they were three decades ago,” the report finds.

The mid-1990s refers to 1995 or the closest available year, while the most recent year refers to the latest pre-COVID year or 2022/23.

Ireland recorded the largest decline in the homeownership rate among people in their 30s over this period. While 81% owned a home in the mid-1990s, this fell to 53% in the most recent years.

Greece also saw a 20-point decline from 78% to 58%.

Two major European economies were also among those with the largest falls. Homeownership dropped from 74% to 56% in the UK, while Spain recorded an 18-point decline from 77% to 60%.

Beyond the deposit challenge

“The most important barrier is how high house prices are compared to incomes for generations that have reached adulthood since the early 2000s,” Jonathan Cribb, deputy director at the Institute for Fiscal Studies (IFS), told Euronews Business, explaining the fall in the UK.

“That’s not just about how hard it is to get a deposit together, it’s about even with good deposits, people not being able to borrow enough to purchase homes in the area in which they live (or nearby),” he added.

J. Antonio Módenes from the Autonomous University of Barcelona pointed to thecollapse of credit expansion following the 2008 financial crash, lower job stability, stricter mortgage lending criteria and declining housing construction in Spain.

Denmark (13 pp), Austria (11 pp) and Luxembourg (10 pp) also saw double-digit declines. Germany and Switzerland (both at 9 pp) were close to this level.

Impact of post-socialist transition

Ján Výbošťok, senior researcher at the Slovak Academy of Sciences, explained that the market was highly centralised during the socialist era before 1989 in Slovakia, and the state was the almost exclusive owner of the entire housing stock. As in other countries that have undergone a post-socialist transition, residents purchased flats for a nominal sum, leading to the privatisation of almost the entire housing stock.

Poland recorded a 20-point increase from 57% to 77%. The Netherlands followed with a 9-point rise.

Dutch expert challenges OECD figures

However, Cody Hochstenbach from the University of Amsterdam challenged the OECD figures. Referring to the Housing Survey (WoON), he noted that homeownership rates among young adults in the Netherlands have fallen since the global financial crisis. For example, the homeownership rate among people aged 25-34 declined from 50% in 2002 to 44% in 2024.

He added, however, that the 1990s and 2000s were a period of rapidly expanding homeownership in the Netherlands across different age groups, helped by policies that stimulated and subsidised homeownership, and the growth of mortgage markets.

Among the five largest economies, France was the only country where the homeownership rate rose by 4 points.

Source: www.euronews.com