The average salary is no longer enough for a standard apartment in most of Europe

More than 70% of Europeans live in regions where a person with an average salary cannot afford an apartment of more than 75 sq. m even with a 30-year mortgage. The situation is particularly dire in large cities and tourist regions, and accessibility problems have simultaneously affected both buying and renting housing.

This is evidenced by a new study by Vienna University of Technology scientists Franziska Sielker and Selim Banabak, published in the scientific journal Journal of Maps. The researchers analyzed more than 22 million property sale and rental listings in more than 30 European countries and compared housing costs with average regional incomes.

Calculations show that for 72% of Europeans, the average salary is no longer sufficient to purchase housing larger than 75 sq. m if no more than a third of income is spent on the mortgage and the loan is repaid over 30 years. This area roughly corresponds to a standard family apartment with two bedrooms.

The situation is even more difficult in large cities. About 44% of Europe's urban population lives in areas where the average income allows you to buy less than 50 sq. m of housing. This corresponds to the area of a small one-room apartment or studio.

The researchers found housing affordability problems in almost all the countries studied. Among the countries where the ratio of housing prices to incomes is particularly unfavorable, Portugal, Poland and the Netherlands are named.

Paris, Berlin and Madrid remain some of the most prominent hubs of expensive real estate. Moreover, price growth in the largest agglomerations is spreading to neighboring cities and municipalities, which could previously serve as a cheaper alternative for buyers.

A separate problem has formed in popular tourist areas. On coasts and in mountain regions, local residents compete for real estate with second-home owners and the short-term rental market. Such pressure is particularly noticeable in Spain, Portugal, France, Greece and Croatia.

The situation does not look much better for renters. According to the study results, about 39% of Europeans live in areas where renting housing of about 50 sq. m would require spending more than a third of the average income on it. The researchers use one third of earnings as the threshold for financially acceptable housing costs.

At the same time, the situation differs significantly across different parts of Europe. In Germany, France and Austria, the average income more often allows you to rent a larger area than buy. In Portugal and Italy, the opposite picture is observed: rental rates have risen so much that the area that can be bought may be larger than what can be rented. A similar situation is observed in the most expensive areas of Spain.

In rural areas, property prices are usually lower, but there is another problem — lack of supply. About 28% of Europe's rural population lives in municipalities where there is virtually no formal rental market and listings for affordable housing are extremely rare.

The authors warn that the real possibilities of the population may be even worse than the calculations show. The study uses the average salary, which is increased by the incomes of the highest-paid workers, while a significant part of the population earns less than the average level.

In addition, the researchers analyzed prices in listings, not the actual cost of completed transactions. The calculations also did not include additional barriers for buyers, such as the need to save a down payment for a mortgage.

According to the authors, the problem of housing affordability is not limited to rising property prices. To narrow the gap, it is necessary to simultaneously take into account prices and income dynamics of the population, since even an increase in housing supply alone does not guarantee that it will become affordable for people with average earnings.

Based on materials from: Journal of Maps, El País