Drivers of Housing Unaffordability in Europe According to Mayors

Housing unaffordability in European cities is being driven by a combination of structural and market pressures, according to Eurocities Monitor 2025. A majority of mayors identify demand outstripping supply as the biggest factor, cited by 76% of cities, followed closely by rising construction costs at 71%. Limited land availability also plays a role, mentioned by 60% of respondents, highlighting persistent constraints on expanding housing stock. By contrast, factors such as speculative investment (29%), regulatory constraints including rent caps (26%), and the growth of short-term rentals (25%) are seen as secondary, though still notable contributors. The findings suggest that while policy debates often focus on regulation, the core of Europe’s housing challenge remains rooted in supply shortages and cost pressures, with significant implications for urban affordability and long-term planning.