The European Investment Bank (EIB) has taken important steps to combat the housing crisis affecting millions of people in Europe. The shortage of affordable and quality housing is a problem that will continue to impact future generations unless decisive action is taken.
To address this issue, the EIB has launched a pan-European investment platform to support affordable and sustainable housing. At the EIB conference “Investing in a Greener and Safer Europe”, plans were announced to allocate €10 billion to this initiative over the next two years.
A key element of the plan is the creation of a universal online portal that will provide financial support and advice on innovations in construction, the development of affordable housing and energy-efficient renovation.
EIB President Nadia Calviño noted that to meet demand, Europe needs to build one million new homes every year, as well as renovate five million homes to reduce their environmental impact. By 2026, the bank plans to double its residential financing to €6 billion, with total investments reaching €10 billion in 2025 and 2026. To successfully implement these plans, the EIB intends to cooperate with national banks, the private sector and the European Commission.
The impact of the crisis on Europeans
The housing crisis is putting significant financial pressure on Europeans. Over the past 15 years, rents have risen by an average of 25%, while house prices have increased by 50%. In 2024, 17% of Europeans lived in overcrowded homes, and one in ten spent more than 40% of their income on housing.
High housing costs have led to young people postponing starting families, students dropping out of university, and workers turning down job offers because of high housing costs. This is having an impact on productivity and quality of life in Europe.
In Cyprus, the government is closely monitoring developments and is planning discussions with the EIB to explore funding options. Potential solutions under consideration include:
- subsidized interest rates for residential construction;
- direct financing of affordable housing projects;
- government development initiatives through the Cyprus Land Development Corporation (Koag).
The government is seeking to secure some of the €10bn fund to help tackle its own housing problems. This could include support for new construction projects as well as upgrading existing housing.
