European Affordable Housing: Investment Potential

In all markets in Europe, there is a clear need for new affordable housing supply and an opportunity for investment. The sector has grown by just 1% over the past decade, but needs to double to meet demand. Some 23m households in those countries are living with a housing overburden, where housing costs over 40% of their income.

The landscape is complex: different countries adopt a breadth of mechanisms, including various tenures, government subsidy, construction incentives, tenant allowance and rental regulation. These strategies have not been able to support affordability at the scale needed. They do, however, strengthen the investment case for greater investment from the private sector.

Investment in affordable housing peaked at €2.6bn in 2023, accounting for 9% of multihousing investment up from 3% in 2022. Investors seeking to tackle the imbalance are drawn by the security of income and the compelling social impact of these assets. Still much more is needed. To produce the homes required represents an investment requirement in excess of €5.3 trillion – demanding significant intervention from both private investors and governments to boost the delivery of new homes.