Investment in the European Union’s housing sector is currently falling short of what is needed to meet rising demand, Interior Minister Constantinos Ioannou said on Tuesday, noting that an additional €650 billion per year is required.

Speaking ahead of the informal meeting of EU housing ministers in Nicosia, which he is chairing under the Cypriot Presidency of the Council of the EU, Ioannou said the housing crisis and lack of affordable homes constitute a shared European challenge requiring a coordinated response.

“The two issues to be discussed today aim at increasing housing supply, which is the ultimate goal, in order to achieve a balance between supply and demand,” he said.

He explained that the first topic on the agenda is reducing bureaucracy and delays in licensing procedures, focusing on simplifying processes. The second concerns investment, including boosting public and private resources and making better use of European funding tools.

“The aim of today’s meeting is to serve as a starting point for dialogue and to identify actions that can strengthen national plans to address the housing problem,” he added.

Addressing participants at the opening of the meeting, Ioannou stressed that housing is not merely a commercial product but “a cornerstone of human dignity”.

“Access to adequate and affordable housing is a fundamental pillar of social cohesion and an essential component of the European social model,” he said, adding that it is also a driver of economic growth and key to mobility, particularly for young people and workers.

He warned, however, that challenges are becoming increasingly complex, citing rising prices, limited supply, high construction costs and demographic pressures, which are making access to affordable housing more difficult not only for vulnerable groups but also for the middle class.

Ioannou said the housing crisis and lack of affordable homes constitute a shared European challenge requiring a coordinated response

Administrative complexity, he noted, is a major contributing factor, delaying both new developments and renovations. “Lengthy procedures, overlapping responsibilities and limited administrative capacity create uncertainty, increase costs and negatively affect both investors and households,” he said, stressing that simplification should not come at the expense of regulation, but rather strike a balance with environmental sustainability and social cohesion.

Ioannou also posed key questions for discussion, including which regulatory barriers most affect housing production and renovation at national level, and which simplification measures have proven most effective in reducing delays and improving predictability, particularly for affordable housing projects.

European Commissioner for Energy and Housing Dan Jorgensen said that Europe is “in the middle of a housing crisis”, with too many people unable to find affordable homes.

“Having a roof over your head, a place to call home, is a human right,” he said, adding that action is needed at EU, national and local levels to ensure access to decent, sustainable and affordable housing.

He pointed in particular to the impact of short-term rentals in many European cities, noting that while they can support incomes and tourism, excessive levels are driving up property prices and displacing residents. “We are preparing a legislative proposal to address these issues,” he said.

Estonia’s infrastructure minister Kuldar Leis highlighted digitalisation as a key tool for accelerating housing supply, saying his country would share its experience, including both successes and challenges.

“Our digital solutions help us maintain regional balance, ensuring housing can be built across the country, not only in major cities,” he said, adding that Estonia will soon publish its first comprehensive housing policy framework.

Meanwhile, Kata Tutto, President of the European Committee of the Regions, stressed the need for a long-term, integrated approach to housing.

“Housing is a problem everywhere in our cities,” she said, adding that it is not just about building homes but about broader urban planning, including transport, public services, water, waste management and sustainable development.

She emphasised that housing policies must form part of a long-term strategy involving local authorities, rather than short-term fixes.