The Catholic Church cannot duck out of the cost-of-living crisis impacting people across the developed world. The problem today does not only afflict densely-populated countries in Europe, but increasingly major metropolitan areas in North America and Australasia as well. The upshot is the delay of family formation, in many cases worsening an already-declining fertility rate, while delaying other rights of passage of adulthood. In other words, the housing crisis is becoming a cultural and spiritual crisis, and one certain to foster intergenerational and interethnic resentment if not remedied.

The situation is especially bad in Europe, where – according to the Telegraph – the “population will halve this century as soaring house prices combined with the fallout from Covid lockdowns force couples to have fewer children.” By the end of the century, Europe “could be home to fewer than 350m people”, according to economist James Pomeroy at HSBC. According to Pomeroy: “Whilst economic development typically lowers fertility rates, in developed markets there is some evidence that fertility rates are being held back by elevated house prices as couples postpone their first child, partly as people tend to get married later, but also because they have to save for longer in order to buy a family home.” 

The problems are especially acute in western Europe, but also in countries like Canada and New Zealand, where house prices are more than 30 per cent higher than in 2015 relative to incomes. However, the situation is actually better in the more traditionalist countries of central and eastern Europe, where wages are also rising fast (although this could lead to inflationary pressures). According to Reuters: “Hungarian private sector wage growth ran well above the central bank’s 2022 forecast in the first quarter, with some analysts projecting a 15% increase for the year. Polish corporate wage growth has also exceeded market expectations since the start of the year.”

According to Eurostat, in 2020 the overall housing overburden rate across the EU was 9.9 per cent in cities and 5.9 per cent in rural areas. However, central and eastern Europe showed up as more affordable: in Poland, for instance, the rate was 5.4 per cent in cities and 4.4 per cent in the countryside, while in Germany it was 11.4 per cent and 6.8 per cent, respectively. It is a similar story in terms of disposable income spent on housing, which gets worse the further west one goes. In Hungary, the rate was 13.3 per cent, and 17.1 per cent in Poland. But this jumps to 21.5 per cent in Germany and Sweden, and 22.3 per cent in the Netherlands. The EU did not count the UK, but in England – between 2020 and 2021 – an average home sold for 8.7 times the average salary. As Stephen Daisley warned in the Spectator: “In 1989, 51 per cent of young families owned their own home; in 2019, it was 28 per cent… In 1997, the median house price was 3.5 times median earnings; in 2021, it was 9.1 times. To make matters worse, average wages fell this year at the fastest rate since 2001.”

In the more Christian countries of central and eastern Europe, which – like Japan and South Korea – have refused to rely on immigration to offset the shortfall in the fertility rate, family-friendly policies have instead been introduced, and the housing burden seems to be less onerous anyway. This is most obvious in Hungary, where state intervention has ensured – since 2010 – that the marriage rate has doubled, the abortion rate has halved, the birth rate has risen by a quarter, and the divorce rate has hit a record low. Other policies include waivers on income tax for women raising at least four children, subsidies for families to buy cars, and loans to help families with at least two children buy homes. Furthermore, every Hungarian woman under 40 is also eligible for a preferential loan when she gets married. 

Such policies are perhaps more easily implemented in countries with strong cohesion but would seem to chime with the values of the Church, for whom the housing crisis matters. Fewer people being able to afford to get married and start families will create an even greater drop in the fertility rate, compounding the collapse in Church attendance. Moreover, should the Church not make more of a noise about the rapacious nature of the Western world’s approach to housing, given that a human right has been turned into a financial asset class? If countries like Hungary and Poland do something about this while others refuse, the European cultural divide will only be baked in further, and Catholicism’s future even more guaranteed to turn eastwards.

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