The rising cost of living is the most pressing concern for more than 90% of Europeans. Official data sheds light on what is behind this growing anxiety.
The rising cost of living is the most pressing concern for more than 90% of Europeans. Official data sheds light on the reasons for this growing anxiety. He household consumption expenditure shows the allocation of expenses incurred by residents to meet their daily needs, such as food, housing, clothing, energy, healthcare and transportation.
Thus, the expenses for housingwater, electricity, gas and other fuels represented the majority of household consumption of the European Union in 2022, with 24.1%. They are followed by food and non-alcoholic beverages, with 13.6%, and transportation expenses, with 12.5%. Although the ranking of these categories has remained constant over the past 20 years, their relative percentages have changed over time.
Comparing the percentages from 2002 to 2022, the most significant change occurred in housing, which increased from 21.1% to 24.1%. That represents an increase of 3 percentage points throughout the two decades. This means that, if a household’s total expenditure was 1,000 euros in 2002, it would have spent 211 euros on housing. In 2022, this amount would have increased to 241 euros.
The increase highlights the increasing financial burden what do they mean essential living costs for European households, probably driven by rising house prices and energy costs over the past two decades.
If the percentage variation is observed, the proportion of health expenses increased by 22%, compared to an increase of 14% in housing. However, since the proportion of housing expenses is significantly higherthe overall impact of rising housing costs is much greater.
Starting just above 20% in the early 2000s, the share of household spending on housing and public services increased steadily, reaching a peak of almost 25% in 2013. This period experienced the most significant growthhighlighting the increase in costs associated with housing and public services.
After a slight decrease, the percentage increased again during the COVID-19 pandemic, reaching an all-time high 25.6% in 2020.
The global increase in spending on housing and utilities over the past two decades indicates that these costs have become an increasingly important part of family budgetswhich reflects economic pressures and changes in the cost of living across the European Union.
Ireland registers the most significant increase
In some countries, the increase has been more pronounced, exceeding 5%. Between 2002 and 2022, Ireland experienced the most significant increase, with an astonishing increase of 7.1%, followed by Spain and Italy, with increases of 6.3% and 5.4%, respectively.
In 10 countries of the European Union, the increase exceeded 4%, which shows an upward trend widespread throughout the region.
Several Eastern European countries, along with Sweden and the United Kingdom, recorded declines in the proportion of spending on housing. Romania, in particular, saw the most significant drop, with a 4.1% reduction, while Bosnia-Herzegovina and Serbia also saw notable declines.
The COVID-19 period
During the COVID-19 pandemic, the share of household expenditure in housing it skyrocketed in almost all countriesreaching historical highs. However, in 2022, as the pandemic subsided, this proportion began to decrease.
If the maximum levels recorded during the pandemicthe global increase in housing spending over the last two decades It’s even more surprising.
Which European countries spend the most on housing?
The cost of housing as a percentage of total household expenditure varies significantly across Europe. In 2022, Slovakia topped the list, with more than 30% of household spending dedicated to housing. Finland and Denmark follow closely, with percentages of 29.6% and 29.1%, respectively.
These figures indicate that the countries of northern and central Europe face significant financial pressuresrelated to housing and public services, most likely driven by higher energy costs or more expensive real estate markets.
On the contrary, southern and eastern European countries, such as Montenegro, Turkey and Albania, have much lower percentages. Montenegro only reaches 11.6%, and Turkey and Albania 12.4% and 12.5%, respectively.
The cost of housing affects households with lower incomes more
A recent OECD report on affordable housing highlights that housing costs can place a high financial burden on households, especially those on lower incomes. The housing cost surcharge rate is alarmingly high between the main European economies. In 2022, almost half of low-income private renters in the UK (49%) were spending more than 40% of their income on rent, followed by 32% in France and 28% in Italy.
