In recent years, a clear trend has emerged: young Europeans from Generation Z (born roughly between 1997 and 2012) are increasingly turning away from the idea of homeownership and choosing to rent instead. While economic realities play a significant role, this shift goes beyond simple affordability—it reflects changing values, lifestyle preferences, and a different outlook on the future.
Housing Prices: A Barrier from the Start
One of the main reasons preventing Generation Z from buying property is the high cost of real estate. In cities like Paris, Amsterdam, Berlin, Barcelona, and Milan, property prices have long exceeded what young professionals can reasonably afford.
For example, in Amsterdam, the average price per square meter is around €6,900, with apartments often costing over €500,000. In Paris, a modest two-room flat easily exceeds €600,000, with down payments of 10–20%, or €60,000–€120,000. For someone just starting their career, this is often out of reach.
Comment: “I work in IT in Munich and earn a good salary, but saving for a down payment would take years of tight budgeting. By then, prices will probably be even higher,” says 27-year-old Thomas K.
Flexibility as a Life Priority
Generation Z is a mobile generation. Many don’t want to “settle down” in one place and prefer the freedom to move cities or countries for work, education, or personal growth. Buying a home restricts that mobility.
Comment: “I moved from Lisbon to Barcelona for an internship. Next year I might be in Berlin. What’s the point of buying property if I don’t know where I’ll end up?” explains Sofia, 24, a digital marketing specialist.
Renting also means avoiding the hassle and cost of property maintenance, repairs, and ownership taxes, which adds to its appeal.
A Distrust of the Property Market
Generation Z came of age during the aftermath of the 2008 financial crisis. Many witnessed firsthand how families lost homes or struggled under mortgage debt. This has fostered skepticism towards long-term financial commitments like 30-year mortgages.
Additionally, the property market’s volatility has led some to question whether homeownership is even a wise investment. In recent years, prices have risen rapidly in some cities, yet rental yields have remained flat or declined.
The Rise of New Rental Models
Europe’s rental market has evolved to meet the preferences of younger generations. Cities are now home to innovative rental concepts tailored specifically for Generation Z:
- Co-living spaces that offer private bedrooms with shared amenities and community events.
- Flexible rental platforms with digital contracts and month-to-month terms.
- Subscription-based housing, which includes furniture, utilities, and even cleaning services.
In Berlin, a room in a co-living space with all services included can cost between €700 and €1,000 per month—often cheaper and more convenient than owning.
From Ownership to Experience
The shift is also philosophical. For many Gen Zers, access trumps ownership. They would rather spend money on travel, experiences, education, and entrepreneurship than tie themselves down with a mortgage. Homeownership is no longer seen as the ultimate marker of stability or success.
Comment: “I don’t want to spend my twenties paying off a mortgage. I’d rather use my money for travel, hobbies, and personal growth. Owning a home feels like a burden, not freedom,” says Lara, 26, a designer from Milan.
Mortgage Hurdles and Lending Practices
Even when they want to buy, young Europeans face tight lending conditions. In countries like Germany, Austria, and France, banks require a stable income history, long-term employment, and substantial savings. Without these, mortgage approval is unlikely.
Interest rates in 2025 hover around 3.5–4%, making long-term loans expensive. Some banks also demand employment records of two or more years, which many young people can’t provide due to internships, gig work, or studying abroad.
Urbanization and Housing Pressure
Gen Z gravitates toward city life—close to work, culture, and friends. Yet, urban housing markets are saturated, and homeownership in central areas is often unaffordable or logistically impossible. Renting becomes the only viable option.
In Lyon, for example, average property prices in the city center exceed €4,800 per square meter, making even small apartments a stretch for young professionals.
Developers Respond to Rental Demand
Real estate developers are adapting. In cities like Barcelona, Copenhagen, and Warsaw, more build-to-rent properties are being constructed with young tenants in mind. These include on-site gyms, co-working spaces, lounges, smart technology, and concierge services.
According to Andreas Möller, project director at Greystar in Hamburg: “We’re seeing strong demand from young renters who value convenience and flexibility. This is a lifestyle choice, and developers must meet that demand.”
Government Policies and Rental Regulation
In many European countries, government policies support renting through subsidies and rent control. France’s APL (housing assistance) program and Germany’s Mietpreisbremse (rent cap) help keep rental costs manageable for young people.
In contrast, homebuyers often face higher transaction fees, stricter borrowing rules, and little direct assistance. Bureaucracy and tax burdens add to the complexity of buying property.
Environmental Awareness and Sustainable Living
Generation Z is deeply conscious of environmental issues. Owning a home typically involves extensive consumption—renovations, appliances, new furniture—while renting often means living in already-furnished, energy-efficient apartments with a smaller ecological footprint.
Eco-friendly rentals powered by solar panels or with shared services are increasingly popular, allowing young people to live more sustainably without the commitment of ownership.
Conclusion: A Reimagined Housing Ideal
Generation Z is not rejecting homeownership forever, but they are delaying or redefining it. For now, flexibility, freedom, and financial autonomy take precedence over property titles and mortgages.
In the coming 5–10 years, we are likely to see the continued growth of the rental sector and an evolving definition of what it means to “have a home.” For Generation Z, a home is not a fixed address or a 30-year loan—it’s a comfortable, flexible, and sustainable place that supports their lifestyle and ambitions.
