What share of income do Europeans spend on housing and what is the situation in Ukraine?

Housing, including utility bills, is the largest item of expenditure. Find out more about how much Europeans spend on housing and how this situation looks in Ukraine, as well as where housing is most affordable

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Housing is a major expense for most people in the world. The cost of renting or owning a home can vary significantly depending on the country, income level and economic situation.

In the European Union, the average housing expenditure is about 20% of disposable income, but in some countries this share is much higher.

Residents of Greece, Germany, and Denmark spend the most on housing, while in countries such as Cyprus, Malta, and Slovenia, this figure is much lower.

In Ukraine, the situation with housing costs is even more complicated. The cost of rent, especially in large cities, can exceed 50% of the average worker's monthly income. In some cases, the rent for a one-room apartment exceeds the entire income of certain categories of workers. For example, in Kyiv, sales consultants spend more than 75% of their salary on rent, and cleaners spend even more than they earn.

Let's take a look at what share of income residents of European countries and Ukraine have to spend on housing, what factors influence this figure, and how the situation changes over the years.

What share of income do Europeans spend on housing?

General picture of spending in Europe

Housing and utilities are one of the largest expenditure items for Europeans. According to Eurostat, in 2023, the average household in the European Union spent 19.7% of its disposable income on housing, which includes rent or mortgage payments, utilities, insurance, and taxes. However, this figure varies considerably among EU member states.

Differences in costs between countries

Among the EU countries, the smallest share of income was spent on housing by residents of Cyprus (11.6%), and the largest share was spent by citizens of Greece (35.2%). In Denmark, this figure was 25.9%, in Germany - 25.2%, while in France, Spain and Italy, housing costs were significantly lower - 17.9%, 17.2% and 14.5%, respectively. In EFTA countries, such as Norway and Switzerland, the level of housing costs was around 25%.

In the Scandinavian countries (Denmark, Sweden, Norway), the share of income spent on housing exceeds 23.9%. Meanwhile, in countries such as Malta (12%), Slovenia (13.8%), Portugal (14%), and Croatia (14.4%), this figure is significantly lower than the EU average.

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Why is Greece a leader in housing costs?

Greece stands out among European countries for its extremely high share of housing costs. This is due to the economic crisis of 2009-2014, which led to a drop in household income by almost 40%. At the same time, low real estate prices attracted foreign investors, which led to an increase in demand and, consequently, housing prices. The introduction of the “golden visa” program and the development of short-term rentals through platforms such as Airbnb have further exacerbated the problem for local residents.

How does income affect the share of housing costs?

People with lower incomes spend a much higher proportion of their earnings on housing. For households on the verge of poverty (with an income below 60% of the national median), the average share of housing costs in the EU was 38.2%. This figure is highest in Greece (62.4%), Denmark (57%), Norway (48.5%), and Sweden (48.1%).

On the contrary, for people with incomes above 60% of the median, the share of housing costs averaged 16.2%.

Eurostat data show that housing costs as a share of income have increased in most European countries over the past three years. The overall growth in the EU from 2020 to 2023 was 1.2 percentage points. In 17 countries, this figure increased by 1 percentage point or more, with the largest increases recorded in Hungary (+5.7 percentage points), Norway (+5 percentage points), Estonia (+4 percentage points), and Germany (+3.7 percentage points).

At the same time, housing costs in Bulgaria decreased by 2 percentage points, which was the most significant drop in the region.

Is it correct to measure housing costs as a percentage of income?

Some experts believe that housing costs as a share of income do not always accurately reflect housing affordability. For example, the OECD report notes that the level of access to mortgages, lending conditions, and the ratio of housing cost to income play a key role in determining the real financial burden on households.

Housing affordability in Ukraine

Rental costs in Ukraine vary significantly by region and income level. In the capital and large cities, this figure can exceed 80% of average earnings, while in less densely populated regions the situation is somewhat better. However, housing costs remain a serious financial burden for most Ukrainians.

The largest share of rental costs is borne by representatives of low-paid professions. To reduce the financial burden, Ukrainians can be recommended the following:

- Renting shared housing. Young professionals often rent apartments together, which allows them to share expenses.

- Search for housing in the suburbs. For example, in the Kyiv region, rent is 20-30% cheaper than in the capital.

- Government support programs. Ukraine has affordable housing programs for young families, IDPs, and the military.

- Mortgage as an alternative to rent. Although interest rates remain high, in some cases the loan repayment can be comparable to rent.

Ukrainians' housing costs remain extremely high, especially in large cities. This makes it difficult to save for a home and worsens the financial situation of citizens. It is important to develop affordable mortgage programs, increase wages, and expand the market for rented housing with regulated prices to reduce the financial burden on citizens.

We remind you! The current reality of Ukraine has forced Ukrainians to look for new ways to protect their property. After all, rocket attacks and UAV attacks have become a serious threat to civilian infrastructure in many regions of the country. Read more about how to insure real estate against damage caused by explosions and falling missiles and shaheds.

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