The rise in housing prices has become one of the biggest challenges in everyday European life, with housing becoming increasingly more expensive. In several capitals, the cost of renting or buying a house grows much faster than salaries, forcing families to sacrifice almost their entire monthly income. And, according to a new European report, this Portuguese city is today the most extreme example of this reality.
Lisbon is the city in the European Union (EU) where residents spend the highest percentage of their salary on housing. The conclusion is part of the report “One roof, many realities: the complex housing crisis in Europe”, presented by the European Council, which reveals that Lisbon residents allocate, on average, 116% of their monthly income to pay rent or credit.
The data, obtained from a study by Deutsche Bank, cited by the digital portal specialized in economics and business Executive Digest, compares the average prices of apartments in the center of the main European cities and the respective salaries.
Iberian Peninsula on the podium
Right after Lisbon come Barcelona and Madrid, with 74%. These numbers far exceed the 30% threshold that experts consider sustainable for families’ financial balance.
The three Iberian cities are above places with traditionally higher costs of living, such as Vienna (37%), Luxembourg (34%), Frankfurt (34%) or Helsinki (35%), showing that the problem is not limited to the difference in purchasing power, but reflects a structural imbalance.
A problem that already crosses borders
The European Council report considers that the housing crisis is today a structural problem that cuts across the entire EU. Despite local particularities, the trend is clear: between 2015 and the first quarter of 2025, housing costs rose 58.33% on average, according to the same source.
Eurostat data shows that Hungary leads the increase (237%), followed by Portugal and Lithuania (147%).
Price growth, fueled by supply shortages, real estate speculation and short-term tourism, has driven families away from urban centers and worsened social inequalities.
António Costa warns of social and economic risks
The President of the European Council, António Costa, highlighted that the problem of access to housing is undermining citizens’ trust in democratic institutions and affecting European competitiveness. “It is necessary to solve the housing problem, otherwise we will reduce trust in institutions and competitiveness will suffer the consequences of this scourge”, he stated, after a meeting in Brussels.
The former Portuguese Prime Minister recognized that housing is a national competence, but defended a coordinated approach at European level, with sharing of instruments and financing. He also highlighted that, in a difficult geopolitical moment, it is essential that European leaders look at the daily concerns of the populations.
Solutions being studied in the EU
According to the previously cited source, the European Commission is preparing a plan to support countries in creating affordable rental and long-term housing policies, providing funds to respond to different local realities. António Costa said that the objective is to “give more room for maneuver” to national and regional authorities, so that they can adapt the measures to their specific situation.
This will be the first time that the housing issue will be formally discussed at a meeting of European leaders, scheduled for Thursday, October 23rd, a sign that the crisis is no longer seen as a local problem and is now being treated as a European issue of the first order.
The cost of living in an increasingly unequal Europe
The housing crisis has become a mirror of the inequalities that cross the continent. Young people who are unable to leave their parents’ home, families who spend their entire salary on rent and workers forced to live far from urban centers are portraits of a Europe where having a roof over your head has become a luxury.
Resolving this imbalance is, according to the European Council itself, essential to restore social trust, protect the right to a dignified life and guarantee economic cohesion. For António Costa, cited by , the way the EU responds to this crisis will define its ability to face the challenges of the future and prove that the European project is still synonymous with well-being and opportunity for all.
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