A Small Studio Apartment Suitable for Living Alone Nears 2 Million Won... Europe Struggles with Soaring Rent Prices

Rental Prices in Lisbon, Portugal Soar 43%
Tenant Burden Increasing in Major Cities

As high interest rates make it difficult to own a home in Europe, housing rents are soaring. Despite major countries implementing rent controls and halting new permits for tourist accommodation rentals (Airbnb) due to excessively high rents, experts point out that the effects are likely to be minimal.

According to real estate services firm Savills on the 22nd (local time), rents in Lisbon, Portugal, surged by as much as 43% in June compared to December 2021. During the same period, rents in Berlin and London also rose by 18% and 14%, respectively.

As high interest rates make it difficult to own a home even in Europe, housing rents are soaring. Due to excessively high rents, major countries have implemented rent controls and halted new permits for tourist accommodation rentals (Airbnb), but there are concerns that the effects remain uncertain.
[Photo by AP · Yonhap News]

In particular, rents in major European cities such as London, Paris, and Berlin are at record highs. In London, UK, renting a small studio apartment suitable for a single person costs around 1,000 pounds (1.7 million won) per month.

According to Savills, assuming the average rent in Europe was 100 in December 2021, this year Lisbon's rent is 143. Berlin is 118, London 114, Madrid 108, and Paris 104.

Governments Take Measures to Lower Rents, but Effects Are Minimal

In some countries, there are also criticisms that rental prices have increased as a side effect of regulatory policies. In the case of Lisbon, rents rose by 37% last year alone.
[Photo by AFP·Yonhap News]

The housing shortage in major European cities is not a recent issue. In Europe, in addition to locals and immigrants, there is steady demand for both short- and long-term rentals from tourists. Especially recently, as high interest rates have dampened home purchase demand, more people have turned to renting, accelerating the upward trend.

Germany's mortgage interest rate, which was around 1.35% annually in January last year, rose to 4.03% by June. The situation is similar in other European countries.

Although governments are taking measures to reduce rents, their effects are limited. Scotland froze rents on existing leases last October, but rents offered across Scotland in June surged by 16% compared to the same period last year.

In some countries, there are criticisms that regulatory policies have backfired, causing rents to rise. In Lisbon, rents increased by 37% last year alone. Due to the Portuguese government's announcement of rent increase regulations, some landlords preemptively raised rents.

New Term 'Boomerang Generation' Emerges Amid High Rents

In Ireland, the proportion of young people aged 25 to 29 living with their parents reached 68% as of last year. The photo shows the downtown skyline of Dublin, the capital of Ireland.
[Photo by Reuters]

In countries such as Ireland, Portugal, and Poland, during the prolonged pandemic-induced economic stagnation, young people who could no longer afford rising rents have given up independent living and returned to their hometowns, coining the new term 'Boomerang Generation.'

In Ireland, as of last year, 68% of young people aged 25 to 29 live with their parents. Experts warn that an increase in the 'Boomerang Generation' could lead to young people missing out on jobs suited to them, creating a vicious cycle of reduced economic opportunities.

Rodrigo Martinez, a professor in the Department of Real Estate at University College London, expressed concern that "(even aside from high rents) young people are facing fewer opportunities to find quality jobs," and that the sharp rise in rents could negatively impact life stages such as dating, marriage, and childbirth.

Furthermore, Professor Martinez warned, "Living with parents for a few more years does not just end there; it means taking low-paying jobs, difficulty finding a partner, and a reduced likelihood of marriage or becoming a parent."

This content was produced with the assistance of AI translation services.