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Report/ European consumers cut spending on food to pay mortgages

2024-10-25 18:20:38, Ekonomi CNA

The Housing Trends 2024 report, compiled by real estate agency RE/MAX Europe, found that more than 1 in 10 Europeans had to cut back on food and basic daily necessities to pay for housing over the past year.

The consumer survey of thousands of participants found that housing costs have risen by an average of 54% in Europe over the past 12 months. More than a third of Europeans (37%) said that while they were and could afford their housing costs, money remained tight. Almost a fifth (19%) said they were struggling to make ends meet.

On average, European households spend 38% of their income to cover rent or mortgage payments and utility bills, with the highest percentages measured in Slovenia (43%) and Portugal (42%). But people living in Switzerland, for example, reported a lower burden, 30%.

To be able to cover rising housing costs, 80% of people in the survey said they had started to cut back on their spending.

About 41% of respondents decided to save on social activities, while 40% had reduced spending on vacations and luxury items.

The expenses that Europeans cut to pay off the home loan

Of those who responded to the survey, around 16% said they had cut their food bills, with the highest percentages, 26%, in Austria and Finland.

When shortening is not enough

A minority of 15% of Europeans reported having had to use some form of borrowing to cover their housing costs. This trend is more pronounced in Turkey (32%), Bulgaria (22%) and Romania (20%).

About a third of those using credit chose to finance their housing costs with credit cards, and slightly less, 27%, turned to family and friends to borrow the necessary funds. A quarter of respondents used overdrafts and slightly fewer (23%) chose to seek unsecured bank loans to cover housing costs.

Nearly half (48%) of respondents across Europe said they expect housing costs to rise further over the next 12 months.

In response to the bleak outlook, a significant proportion of Europeans are considering drastic changes; a more affordable life would be enough for 32% of people to move to a smaller city or town and 24% are ready to move abroad for the same reason. However, about 21% of them were not at all open to moving.

Sustainability remains a low priority in the family

Of those asked in Europe, 18% said they have difficulty paying their energy bills, and this percentage was particularly high in Greece, where 36% of residents face major difficulties in managing their energy costs.

Due to already high costs, eco-friendly home improvements have taken a backseat to many households, whose priority remains paying immediate bills rather than long-term sustainability.

There are still more than a quarter of respondents (27%) who would consider installing solar panels, and slightly fewer (25%) would install double glazing. Rainwater harvesting measures and heat pumps are less of a priority, with only a fifth of people saying they would consider installing them.

Almost half of the respondents said that increased government support or subsidies could motivate them to install energy efficient measures.

Where in Europe are people satisfied with housing?

Despite concerns about housing costs, levels of housing satisfaction remain high in many parts of Europe.

Those in the Netherlands and Romania are most satisfied with their housing situation, with 84% of people reporting satisfaction. There is a relatively high rate of home ownership and good quality of housing available in these countries, which may explain the result.

On average, 76% of Europeans are satisfied with their housing. At the other end of the scale are those in Malta, the Czech Republic, Slovenia, Hungary, Turkey, Greece and Ireland.

Percentage of Europeans satisfied with their housing

Dissatisfaction stems from various issues, for example, the need for more space is a key concern, especially in Poland, where 58% of residents cite this as the cause of dissatisfaction with their living circumstances, which compares with the European average of 37%.

Cost is another key issue, with a third (33%) of dissatisfied respondents saying their property is too expensive. This rate is up to 53% in Malta, 48% in Ireland and 48% in Finland.

Furthermore, almost half of dissatisfied residents in Portugal reported problems with dampness or mold, while a fifth cited hygiene problems as the main problem in the Netherlands./ Euronews