Northern and Central European countries are facing significant financial pressures related to housing and utilities, most likely caused by higher energy costs or more expensive housing markets.
Housing maintenance costs in Bulgaria decreased by 2.6% over 20 years. In 2022, Bulgarians spent an average of 18.4% on home maintenance, as much as Romanians. This figure is below the average for the European Union - 24.1% and far behind the leaders from Slovakia, Finland and Denmark, where they are separated on average between 29-30%, Euronews reports.
EU housing costs on the rise: which countries saw the biggest increase?
The share of household expenditure on housing, water, electricity, gas and other fuels has increased significantly over the past 20 years. Euronews takes a closer look at which countries have seen the biggest increase.
The rising cost of living is the most pressing issue for more than 90% of Europeans, according to the European Parliament's Eurobarometer survey from autumn 2022. Official figures shed light on what is behind this growing concern. Household consumption expenditure shows the distribution of expenditure incurred by residents' households to meet their daily needs, such as food, rent, clothing, energy, healthcare and transport.
According to Eurostat data, in 2022 housing, water, electricity, gas and other fuels will have the largest share in household consumption in the EU - 24.1%. This is followed by food and soft drinks at 13.6% and transport costs at 12.5%. While the order of these categories has remained constant over the past 20 years, their relative shares have changed over time.
What do the "housing, water, electricity, gas" costs include?
According to Eurostat, these costs include actual housing rents; assumed residential rents; home maintenance and repair; water supply and various services related to housing; electricity, gas and other fuels.
Comparing data from 2002 to 2022, the most significant change occurred in household spending, which increased from 21.1% to 24.1%. This represents an increase of 3 percentage points (pp) over the two decades. This means that if in 2002 the total expenses of a household amounted to 1,000 euros, it had to spend 211 euros on housing. By 2022, this amount jumps to 241 euros.
This increase highlights the growing financial burden of basic living costs for European households, likely driven by rising housing and energy prices over the past two decades.
When we look at healthcare costs, they have increased by 22% compared to a 14% increase in housing costs. However, because the share of housing costs is significantly larger, the overall impact of an increase in housing costs is much larger.
Starting at just over 20% in early 2000, the share of household spending on housing and utilities has steadily increased, reaching a peak of almost 25% in 2013. This period saw the most significant increase, highlighting the rising costs associated with housing and utilities.
After a slight decline, the share rose again during the Covid-19 pandemic, reaching a record high of 25.6% in 2020.
The overall increase in housing and utility costs over the past two decades shows that these costs are becoming an increasingly significant part of household budgets, reflecting wider economic pressures and changes in the cost of living in the EU.
The most significant increase was observed in Ireland
In some countries, the increase is more pronounced and exceeds 5 percentage points. Between 2002 and 2022, the most significant increase was reported in Ireland, where it was a staggering 7.1 percentage points, followed by Spain and Italy, where the increase was 6.3 percentage points and 5.4 percentage points respectively. In 10 EU countries, the increase exceeded 4 percentage points, highlighting a widespread upward trend across the region.
Several Eastern European countries, as well as Sweden and the United Kingdom, saw a decline in the share of housing costs. The most significant decline was recorded in Romania at 4.1 percentage points, while Bosnia and Herzegovina and Serbia also saw notable declines.
Period of Covid-19
During the Covid pandemic, the share of household expenditure on housing rose in almost all countries, reaching record levels. However, in 2022, as the pandemic subsides, this share begins to decline.
Which European countries spend the most on housing and bills?
Expenditure on housing, water, electricity, gas and other fuels as a percentage of total household expenditure varies widely across Europe.
In 2022, Slovakia tops the list with over 30% of spending going to housing, water, electricity, gas and other fuels. Finland and Denmark followed closely behind, with 29.6% and 29.1% of housing and bill costs respectively.
These data show that the countries of Northern and Central Europe are facing significant financial pressures related to housing and utilities, most likely caused by higher energy costs or more expensive housing markets.
In contrast, the countries of Southern and Eastern Europe, such as Montenegro, Turkey and Albania, have much lower shares: Montenegro - only 11.6%, and Turkey and Albania - 12.4% and 12.5% respectively.
Housing costs hit lower-income households the hardest
A recent OECD report on affordable housing highlighted that housing costs can impose a large financial burden on households, particularly those on lower incomes.
The rate of housing cost overburden is alarmingly high among leading European economies. In 2022, almost half of low-income private renters in the UK (49%) spent more than 40% of their income on rent, followed by 32% in France and 28% in Italy. | BGNES
