One person built a 312-region housing affordability map that the EU couldn't
The Housing Market Is Nuts
Housing is Europe's largest household expense, yet official data can't answer the simple question of whether you can afford to live somewhere. Eurostat's burden indicator counts mortgage interest but not principal, so crisis-hit Portugal ranks as least burdened while the Netherlands looks worst. The EU's flagship housing page cites a chain ending in crowd-sourced Numbeo. So a single volunteer stitched together data from five national statistics offices to compute housing purchase effort — months of local salary per square metre — across 312 NUTS-3 regions.
The reference chain is: Council of the EU → Euronews → Deutsche Bank report → Numbeo.
- m000
Despite having an "elephant in the house" section, TFA mistakes a goat for an elephant. The real elephant is deregulation and the financialization of housing, i.e. allowing housing to turn from a commodity into an investment vehicle.
I can see at least four ways how this is happening today:
(a) Allowing private equity to accumulate large swathes of housing. No explanation needed. These purchases are made to turn a profit, and they will do. Whatever that takes: bribe, extort or steal.
(b) Banks giving individuals cheap financing for a second, third or fourth house. This was very common in the Netherlands. I.e. if you're reasonably well-off, a bank would give you a huge % loan for your second house while you still haven't paid off the first one. Your first house becomes a rental that pays itself off, and you pay off the second with your earnings. This effectively means that lower-income households are forced to rent perpetually.
(c) Counting the purchase of a house as an "investment" towards Golden Visa eligibility. This is very common in Portugal and Greece and effectively sets a floor for house prices. Everything else is then adjusted accordingly.
(d) Short-term rentals in popular destinations. Enough said.
TFA is essentially using number crunching to whitewash decades of bad housing policies. I'm not in a position to tell whether that was the goal, but it definitely is the result.
- ghomem
I wrote this story. Thanks for reading. It is certainly not perfect but I hope it is useful. Would be good if our statistical authorities could read it and understand the data gaps that we face.
- aintnolove
My relatives who are nurses/tradespeople don't earn much, but since they live in LCOL/MCOL areas, most of them have always owned houses with hot tubs and garages in nice quiet areas. Meanwhile my big fancy tech job netted me roommates or small apartments in areas with frequent vehicle break-ins, otherwise I'd have needed to spend 50% of my TC on housing or commute 3 hours a day.
I finally got a job in a MCOL area and it's such a breath of fresh air. Yes my TC is lower, but for <$4k a month, I have a house in a nice area 30 minutes from the office AND I'm allowed to have pets. In the Bay Area or NY, pet friendly 3000sf houses like mine are rare, especially if you're filtering out long commutes and high crime areas. At best, I'd be getting a $2.5M mortgage or spending $8k on rent for a smaller house with a smaller yard, and my commute would be 90+ minutes a day.
It absolutely sucks that so many companies think it's impossible to open smallish offices in MCOL/LCOL areas that would transform their employees financial lives. Guess they're always optimizing for overhead cost per employee.
- ricardobeat
The data shown here makes the situation in the Netherlands look a lot better than reality:
the number of months of gross salary needed to buy a single square metre (0.86 - 1.8)
18 years to repay, Amsterdam, 50m²
The average selling price in Amsterdam is €8,600/sqm against a €2,600 minimum wage and €4,500 average, so that ratio is actually 2x - 4x. A 50m2 apartment is going for 400k-500k, repayment will take 30+ years. Better family housing with two or three bedrooms crosses >600k.
Yes, salaries in NL can be much higher but it's still a bleak picture. Almost every young professional is priced out of the market.
- Murskautuminen
It was a bit of a long read and started losing focus towards the end and goes around the same concept in different words. It is not clear to me if wages are adjusted every year (e.g. 2-4% to adjust for inflation) during the mock example calculations of repaying a 50m2 apartment. The odd thing about most mortgages is that they lock in a price of today for 5-30 years, but typically your wage does increase, hence the years to pay back the mortgage might technically be lower than calculated. Even if the current analysis does not cover this, I actually thought the years to pay back the mock loan are not that bad in most of these places. Sure 50m2 is small, but it uses only a single income and does not include any non standard income. It would be important to get net salaries in these regions, but it will make it an almost impossible task.