Europe’s Housing Crisis: Protests, Inflation, and the Search for Solutions

While global attention is focused on large‑scale protests in France, unrest is also spreading across other European countries. Mass nationwide demonstrations have recently taken place in Spain, Italy, and Portugal—all driven by a growing housing shortage and rising rental costs. This article explores why the issue has become so acute, what factors are fueling it, and how long the crisis might last.

Out on the Streets

This autumn, housing problems escalated into major protests in several European cities. In Lisbon, Portugal’s capital, residents took to the streets on October 17, 2026, to protest the extremely high cost of living and low wages. Even after police dismantled tent encampments, demonstrations continued throughout the week.

Protests organized by CGTP, the country’s largest trade union federation, also unfolded in Porto and Coimbra. According to the union, “thousands of workers” participated in the demonstrations.

“Portuguese taxpayers are under attack right now—we’re losing our rights, especially the right to housing,” said Elena Costa, a 46‑year‑old social worker, in comments to The Guardian. “That’s why we’re all here: we feel like we’re suffocating.”

Data from Business Insider shows that around 12.7 % of Portugal’s population lives in overcrowded conditions. In Q2 2026, housing prices in the country posted the largest annual growth rate (+16.5 %) among all EU member states. According to the European Council, average rent in Lisbon equals 116 % of the average monthly salary—meaning it exceeds typical earnings by 16 %. Barcelona and Madrid share second place with rents at 74 % of average income, while Milan ranks third at 72 %.

It’s no surprise that citizens in Spain and Italy also took to the streets this autumn. In Milan, protests against rising living costs on October 17–18 turned into clashes between demonstrators and police. Violent incidents were reported in Piazza Duomo—the city’s main square, home to the Milan Cathedral—and in one of Milan’s busiest tourist areas, where looters damaged shop windows and set objects on fire.

“Participating in demonstrations is a right. Burning our cities is not,” Italian Prime Minister Giorgia Meloni wrote on X (blocked in Russia) on October 18.

Italy’s annual inflation rate jumped to 4.1 % in September, up from 3.2 % in August. In Milan alone, housing prices have risen by 49 % since 2018.

In Spain, outrage over rapidly rising housing costs erupted into nationwide protests last month, triggered by the eviction of 87‑year‑old Maricarmen Abascal from the apartment she had lived in for 70 years. She could no longer afford the rent after an investment company that bought her flat increased it by 230 %—from €550 to €2,650. The rent later dropped to €1,650, but even that amount was unaffordable for Abascal. The elderly woman, who usually used a wheelchair, was carried out of her apartment on a stretcher. A court later allowed her to return to her Madrid flat, but her health had deteriorated by then, and she died in hospital on October 7, 2026. Maricarmen became a national symbol of the housing crisis.

To be fair, Spanish protests have been relatively peaceful, and their participants seem more inclined toward dialogue with authorities than French protesters. Spaniards mainly express dissent by setting up tent encampments—similar to the 2011 “Indignados” movement, which occupied a Madrid square for 28 days before similar actions spread to other cities.

Political analyst Estefania Molina told the New York Post: “In 2011, people demonstrated because they couldn’t buy an apartment. Today, we’re protesting because we can’t rent a room in someone else’s flat.”

Anna Semenova, a representative of the Globe real estate agency in Spain, confirms that current demonstrations against the housing crisis remain peaceful.

“In Spain, people have the right to voice their opinions and openly express dissatisfaction. The government isn’t exactly thrilled by these popular uprisings, but there’s no rush to ban or suppress such expressions of civic position—at least not until they turn into aggression or lawbreaking. Still, having the right to speak out doesn’t guarantee that demands will be met,” she said.

Earlier this spring, protests against rising housing costs also took place in London, forming part of a broad, coordinated national campaign that united dozens of organizations, including tenant unions, housing groups, and trade unions. By that time, the average rent for a room in the UK capital exceeded £1,000 (about $1,340)—a threshold described as “depressingly high” by local outlet Metro. Protesters called for rent controls, an increase in social housing, and greater accountability for landlords and real estate providers.

“The consequences of the crisis go far beyond the property market,” says Victor Zubik, founder of Smarent management company. “It’s becoming increasingly difficult for young people to start independent lives; families must delay moving, and workers often can’t afford housing in cities where suitable jobs are available. Social inequality between property owners and renters is also growing.”

Oil, Students, and Tourism

The case of Maricarmen Abascal was the final straw for many Spaniards. Public dissatisfaction with the real estate market has been steadily rising over the past few years. One major factor is excessive tourism, which locals believe drives up the cost of living, harms the environment, and worsens the housing crisis. Anti‑tourism demonstrations frequently occur in mainland Spain, Mallorca, and the Canary Islands.

Income isn’t keeping pace with rising housing costs, while population growth in cities—fueled by tourism and immigration—adds further pressure on limited housing supply. According to the Bank of Spain, the country faces a housing deficit of approximately 750,000 units, expected to reach 1 million by 2028. Much of this shortfall is concentrated in Madrid, Barcelona, and Valencia.

Irina Mosheva, managing partner at Intermark Global luxury real estate agency, argues that protests over evictions and affordability reflect not just economic hardship but also a broader societal concern: the question of who can afford to live in their own city is becoming politically sensitive.

“Spain is one of the most telling examples of how housing issues turn into social and political problems. In Madrid, Barcelona, Malaga, and other high‑demand cities, several factors converge: rising rents, a limited supply of affordable housing, tourist demand, and competition for property among people with different income levels,” she noted.

According to Eurostat, the EU’s statistical office, in 2024 housing expenditures exceeded 40 % of disposable income for nearly 10 % of urban households and 6.3 % of rural households across the Union.

Mikhail Bulanov, co‑founder and managing partner of Tranio international property brokerage, links the European real estate crisis to rising inflation—largely driven by expensive oil and energy. At the same time, access to financial instruments is becoming more difficult. Moreover, the sharp rise in mortgage costs due to the ECB’s interest rate hikes directly affects housing affordability.

However, the scale of the problem varies across EU countries. For example, more than a quarter of urban Greeks (29 %) face housing costs exceeding 40 % of their income, while only 2.6 % of urban Cypriots experience the same burden. In 2024, Greek households spent about 35.5 % of their income on housing—the highest share in the EU, according to the European Parliament.

Eurostat data also shows that between 2015 and 2024, house prices in the EU rose by an average of 53 %. The largest increases were recorded in Hungary (+209.5 %), Lithuania (+135 %), and Portugal (+124.4 %). Rental prices also went up. Between 2010 and Q1 2025, rents increased by an average of 27.8 % across the EU. Rents rose in every EU country except Greece (–11 %). The biggest increases were seen in Estonia (+220 %), Lithuania (+184 %), Hungary (+124 %), and Ireland (+115 %).

EU institutions identify limited supply as one of the key drivers of the housing crisis. A European Parliament report notes that the 2008 global financial crisis led to a sharp decline in investment in new housing. The COVID‑19 pandemic further slowed construction by disrupting permit processes, delaying material deliveries, and causing labor shortages.

Anna Semenova believes the causes of the housing crisis are broadly similar across Europe: demand outpaces supply, there’s a shortage of social housing, construction is too slow, and migration flows add pressure.

Another factor is population concentration in major cities. People continue to move to urban centers for work and study, while rural areas see more vacant homes, according to a European Parliament report.

“Berlin attracts professionals from all over the world, which is why it remains one of Europe’s startup hubs,” explains Arik Shabanov, investment expert and managing partner at Prime Legal law firm. “In 2023–2024, Spain saw a noticeable increase in migration from Latin America, and student flows add another layer of pressure to the market. As a result, multiple groups are looking for housing at the same time.”

Semenova stresses that solving the housing crisis requires faster construction—which is easier said than done. She also sees promise in developing less densely populated areas of Spain, such as northern regions and parts of the coast.

“I believe the Costa Blanca region has huge potential,” she said. “This part of the coast isn’t as heavily built up, and property prices for purchase and rent are significantly lower than in Barcelona or Malaga. You can buy an apartment in Torrevieja (Costa Blanca) for €150,000–160,000. In Barcelona, apartments cost around €250,000–300,000. The goal should be to encourage more even distribution across Spain rather than having everyone concentrate in big cities like Barcelona and Madrid or in popular resort areas like Costa del Sol, Costa Brava, and Costa Dorada.”

In coastal and tourist cities, the housing shortage is partly due to rising demand for short‑term rentals. As this market has grown rapidly in recent years, some homes and apartments have shifted away from long‑term tenants.

According to the European Parliament, in 2024 EU travelers booked a total of 854.1 million nights via four major online platforms (Airbnb, Booking, Expedia Group, and Tripadvisor)—a record high and an 18.8 % increase compared to 719.0 million nights in 2023.

Irina Zyryanova, President of the Russian Guild of Realtors, says the current crisis in the EU is particularly visible in the rental market: “Authorities are trying to cap rent increases, which conflicts with landlords’ interests. This creates a socio‑political tension that overlaps with supply shortages in popular locations and leads to outbreaks of public discontent, as seen in Spain, Italy, Portugal, and elsewhere.”

She adds that EU governments, burdened with public debt, “cannot provide housing subsidies to every needy tenant, nor can they radically restrict landlords’ freedom to set prices or build enough social housing for everyone in need.”

What Can Be Done?

Spain previously attempted to ease the crisis in 2021. As Bloomberg reported, the short‑term rental market faced stricter oversight—for example, Barcelona authorities called for limits on short‑term rentals and even a complete ban for some landlords. Yet many urban residents feel these measures are insufficient as housing prices continue to climb out of reach.

A new 10 % VAT is being introduced on furnished holiday apartments rented for up to 30 nights, with an exception when the property is the landlord’s usual place of residence (i.e., where they actually live). The tax applies to properties where owners provide hotel‑style services such as cleaning, laundry, or dining.

Spanish Prime Minister Pedro Sánchez announced early elections for November 2026, acknowledging that his government “made mistakes and failed to deliver everything we planned.”

Although housing policy is mainly managed at national, regional, and local levels, similar trends appear across the EU: insufficient housing construction, migration waves, falling incomes, and rising rents. After the 2024 European elections, European Commission President Ursula von der Leyen highlighted housing as one of the EU’s social priorities.

Zyryanova believes that given the multifaceted nature of the current European crisis, no single universal solution will work. Instead, a combination of three approaches is needed: increasing housing supply, creating a sustainable segment of below‑market housing, and providing targeted support to buyers and tenants.

“Authorities recognize the need to boost supply in cities and agglomerations that attract large numbers of people. For instance, they could allow apartment buildings in areas where only single‑family homes were previously permitted, or increase allowable building density,” she explained.

Zubik argues that European authorities should shift focus from supporting demand to boosting supply.

“Subsidies and preferential loans help certain groups, but in a shortage environment they can actually push prices higher. It’s far more important to reduce approval times for construction projects, bring unused land into use, develop social and affordable rental housing, and improve suburban transport infrastructure,” he said.

As governments search for solutions, citizens are finding their own ways to cope: living in mobile homes, cutting construction costs. For example, a young British couple saved £100,000 ($134,000) by building a house from polystyrene blocks instead of bricks. These blocks, which fit together like giant Lego bricks, are filled with concrete to create strong, well‑insulated walls.

Faced with unaffordable rents, 34‑year‑old caregiver Kirsty Brett moved into a $10,000 motorhome, buying it on credit and selling her cars. She now pays £400 per month on the loan and £140 for car insurance.

“If, like me, you’re okay with small but tidy spaces, this is an option. It may not be perfect, but a motorhome has everything you need: a bed, kitchen, toilet, and TV,” she wrote.

UK authorities have also proposed another initiative: converting historic buildings that have long remained unoccupied into housing. The House of Commons Culture, Media, and Sport Committee stated that using heritage buildings to address the UK’s housing shortage “is no longer a niche or secondary option, but an important and underused way to tackle the acute housing shortage.” Preliminary estimates suggest that restoring underused or unused old buildings could yield around 670,000 homes—helping meet the Labour Party’s target of building 1.5 million homes by 2029.

Mosheva believes ideas like repurposing historic buildings have merit, but it’s important to distinguish between temporary solutions for people in crisis and proper long‑term housing.

“Rent controls may offer short‑term relief for tenants, but without enough supply, overly strict regulation can discourage landlords from renting or investing in new properties. That’s why regulation must be paired with incentives for construction, renovation of the housing stock, and infrastructure development outside the most expensive areas,” she noted.

What Happens Next?

At a Eurogroup meeting dedicated to the housing crisis, Greek Finance Minister Kyriakos Pierrakakis noted that housing policy “is firmly moving onto the European agenda,” yet “no country has found a single, definitive solution yet.”

Bulanov believes that, conceptually, resolving the affordability crisis requires an economic growth cycle. However, given current inflation trends and the tightening monetary policies of global central banks, such a cycle isn’t expected anytime soon.

“According to our calculations, the first significant response from the Fed and ECB (with the ECB typically reacting later) appears only in the fifth month after an oil shock and continues to build over the next two years. Predicting when the cycle will reverse is difficult. The most troubling part is that inflation doesn’t automatically fall when oil prices correct, and central bank policies are influenced by external factors. As housing affordability crises deepen, social tension will grow, and similar cases will keep appearing in the news,” he added.

Mosheva argues that lasting change requires housing supply in Europe to grow faster than demand in the most overburdened areas. This could be supported by speeding up approvals, developing transport infrastructure, building housing across different price segments, and establishing clear, long‑term rules for owners and investors.

Anna Semenova, who has lived in Spain for many years and knows the market from the inside, believes that given the current global and political situation and ongoing inflows of new residents to Spain, the market isn’t likely to stabilize anytime soon. Supply simply can’t keep up with demand, and square‑meter prices keep rising.

A quick resolution to the crisis shouldn’t be expected, Zubik agrees.

“In Europe’s largest cities, the shortage of affordable housing will likely persist for several more years,” he said. “But the key point is that the effectiveness of housing policy shouldn’t be measured only by the number of square meters built or subsidies issued. It should be judged by how much of a household’s income goes toward housing. After all, the ultimate goal isn’t just to build more—it’s to ensure that working people can afford to live comfortably in the cities where they work.”