Young Europeans struggle to achieve homeownership as wealth gap widens

Europe faces a deepening housing crisis, with younger generations increasingly unable to follow the homeownership trajectories of their parents. Data from the OECD shows a steady decline in the proportion of young adults who own homes, reflecting broader challenges in affordability and access to credit.

According to the OECD’s “Mapping trends and gaps in household wealth across OECD countries” report, homeownership rates among younger cohorts have fallen markedly compared with earlier generations. In a sample of 20 EU countries, 60% of those born around 1975 owned a home by age 32, dropping to 58% for the 1980 cohort and further to 52% for the 1985 cohort—an eight‑percentage‑point gap over a decade.

By age 36, 65% of the 1970 and 1975 birth groups owned homes, while the 1980 cohort lagged at 60%. The decline continues into later ages: at 44, the earlier cohorts still hovered around 68‑69% homeownership, whereas more recent groups show significantly lower figures.

For those born in the 1980s and 1990s, the pattern is even more pronounced. At age 29, the 1980 cohort’s ownership stood at 52%, sliding to 45% for the 1985 group and 41% for the 1990 group. Even at age 23, ownership fell from 32% (1985 cohort) to 26% (1990 cohort). In contrast, the earlier generations—born in the 1960s and 1970s—maintained ownership rates above 68% well into their forties.

Key drivers of the decline

OECD experts cite a combination of factors. Since 2021, rising interest rates have made mortgage credit harder to obtain and more expensive, while house‑price growth has outpaced wage increases. “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 note.

Higher enrolment in tertiary education has also delayed entry into the labour market and the transition to independent living. Country‑level data reinforce these trends, with the OECD Employment Outlook 2025 showing a drop in homeownership among people in their 30s in roughly two‑thirds of European nations when comparing the mid‑1990s with the most recent pre‑COVID years (2022/23).

Some of the most severe declines are observed in Ireland, Greece, the United Kingdom and Spain. Ireland’s rate fell from 81% to 53% (a 28‑point drop), while Greece saw a 20‑point decline. The UK dropped from 74% to 56%, and Spain fell 18 points to 60%.

More than just a deposit problem

Jonathan Cribb of the Institute for Fiscal Studies explains that the core issue is the ratio of house prices to incomes. “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 says.

In Spain, J. Antonio Módenes of the Autonomous University of Barcelona points to the collapse of credit after the 2008 financial crisis, lower job stability, tighter mortgage lending standards and a slowdown in housing construction. Double‑digit drops were recorded in Denmark (13 points), Austria (11 points) and Luxembourg (10 points), with Germany and Switzerland near that level at 9 points each.

Exceptions and contrasting trends

Three countries experienced notable increases. Slovakia’s homeownership share among people in their 30s rose from 38% to 88%, while the Czech Republic saw an rise from 36% to 76%. In Slovakia, the post‑socialist privatisation of state‑owned housing stock allowed residents to purchase flats for nominal sums.

Poland recorded a 20‑point gain, reaching 77%, and the Netherlands added 9 points.

Debate over the figures

Cody Hochstenbach of the University of Amsterdam challenges the OECD’s broad numbers, citing the Dutch Housing Survey (WoON). He notes that while the 1990s and 2000s saw rapid expansion of homeownership, rates among 25‑34‑year‑olds fell from 50% in 2002 to 44% in 2024. He argues that national policies and mortgage‑market dynamics have had a complex, sometimes contradictory impact.

Among the five largest European economies, France was the only one where homeownership rose, increasing by four points.

Source link