The impact of housing policy on the rental market
European Central Bank Vice President Luis de Guindos has expressed concern about how current regulations may affect the availability of rental housing in eurozone countries. In his view, existing restrictions could negatively impact the supply of apartments, ultimately making it harder for many citizens to solve their housing issues.
He noted that in recent years, property prices in the region have risen significantly, but the pace of new construction remains low. This has made renting increasingly unaffordable, especially for young people and families with modest incomes. In a situation where buying a home is out of reach for many, the rental market should ideally help cushion the effects of the crisis; however, that is not happening.
Social and economic consequences
De Guindos emphasized that the current situation affects not only individual households but also the broader economy. A shortage of affordable rental options can undermine citizens’ trust in economic prospects, which in turn holds back the recovery of consumer activity. According to him, despite lower inflation and rising disposable incomes, there has yet to be a noticeable increase in household spending.
The expert links this to a range of factors, including geopolitical instability, fiscal risks, and uncertainty in the real estate market. He believes that overcoming these challenges requires a thorough review of existing regulations to ensure they do not hinder rental market development or worsen the housing shortage.
Assessment of the current economic situation
The ECB Vice President also shared his view on current macroeconomic trends in the eurozone. According to him, despite sluggish consumption growth, the overall situation remains stable. The region’s economy is showing modest but positive growth, which supports expectations for GDP growth in the coming months.
He noted that inflation in the services sector, which caused serious concern just a year ago, is now under control. Wage dynamics are also in line with the regulator’s expectations. Under these conditions, de Guindos believes that the current key interest rate level is optimal for maintaining a balance between growth and price stability.
Outlook and next steps
Looking ahead, the ECB representative stressed that the regulator is ready to respond to any changes in the situation if new risks emerge. At the same time, he sees no reason for drastic moves, since current inflation and economic growth figures meet the bank’s targets.
In conclusion, de Guindos emphasized the importance of a flexible approach to regulating the exchange rate. He noted that the ECB does not set strict targets in this area, but monitors its trends closely to respond promptly to possible fluctuations.
