Europe’s housing shortage cannot be resolved by halting construction, even as demographic decline shapes long-term policy thinking, says a senior industry official.
Frank Hovorka, technical and innovation director at the French Real Estate Federation (FPI), pushed back against arguments gaining traction in some policy circles that new building should be suspended in favour of retrofitting existing stock. The case for a construction moratorium holds that new building materials carry heavy carbon costs and that a shrinking European population reduces the need for additional homes.
Speaking at a Construction Products Europe workshop in Brussels on 9 June, Hovorka presented modelling based on France’s 2050 climate targets showing two viable pathways to compliance: a complete halt to construction, or continuing to build at a rate of 400,000 units a year.
He also challenged the sector’s instinct to focus narrowly on building fabric. “In a simplistic way, it’s better to have an energy-inefficient building with people coming by subway than a low-emission building with people coming by car using fossil fuels,” he said.
Whole-lifecycle global warming potential
Niels Ruijter, managing director of the Dutch Association for Construction Supply (NVTB), hailed the EU’s shifting focus from energy performance to whole-lifecycle global warming potential (WLC GWP) as part of the revised Energy Performance of Buildings Directive (EPBD) as necessary. However, he warned that allowing member states to introduce their own weighting factors could disrupt cross-border trade and hinder innovation.
“There are lobbyists from all over the place jumping onto this,” Ruijter said, adding that different types of materials are being pitted against each other, and that member states are not obliged to introduce such weighting systems. “Let’s start with implementing the legislation as it is,” Ruijter said.
These arguments set the stage for a broader paradox that ran through the afternoon. Sorcha Edwards, secretary general of Housing Europe, noted that even as the housing crisis has been elevated to a top EU priority, member states are reporting that the accumulation of new legislation is actively slowing housing production and permitting.
Commission’s data dream
It was not the only paradox on offer. While several speakers did appeal for consistent policies, a need for better data management emerged as one of the afternoon’s key topics. Natalia Zebrowska, head of unit at DG Grow, the Commission’s industry department, observed that it is almost unheard of for Commission officials to be asked by an industry to add information requirements.
Hovorka noted that investors routinely pay big firms hundreds of thousands of euros to reconstruct product information that already exists in manufacturers’ databases.
“It’s crazy because it’s data we have in our products, but we have to pay one of the ‘Big Four’ to re-collect and re-engineer the data,” Hovorka said.
He drew an analogy with the banking sector, saying 50 years ago, banks were as fragmented as construction is today. They solved it by agreeing to standardise data exchange, which gave the world bank cards. Construction, he argued, needs the same collective leap.
Some progress has already been achieved in embracing digitalisation. Edwards pointed to Estonia, where all permitting processes are now accessible through a single website. In the Netherlands, the NVTB developed an open API for product data sharing, available on GitHub and designed to connect with any data space framework.
Zebrowska said a main “dream” the European Strategy for Housing Construction hopes to realise is to see the flow of data throughout the life cycle of construction projects. Comes as the Digital Product Passport (DPP) will become mandatory in 2028 under the new Construction Products Regulation (CPR).
On the issue of China
The threats facing the sector, however, are not only internal. “For the first time, we are seeing Chinese products entering European markets in quantities we have never seen before,” said Construction Products Europe President Pascal Eveillard, warning that the sector, accounting for roughly 10% of EU GDP, is facing growing competitive pressure.
The concern surfaced repeatedly throughout the conference, particularly as Brussels increasingly promotes industrialised and off-site construction as part of its response to the housing crisis.
While EU manufacturers have benefited from using cheap Chinese parts to create their own products, more recently, China has increasingly become an exporter of final goods itself. The ECB reports that the share of sectors in which China is directly competing with euro area exporters is nearing 40%, up from 25% in 2002.
Attendees also heard from Adolfo Aiello, Eurofer’s deputy director general, who argued that Europe’s steel industry offers a cautionary tale for the rest of the construction value chain. Construction accounts for almost 40% of EU steel consumption, making it the sector’s largest customer.
According to Aiello, the steel sector experienced China’s industrial expansion years before many other industries. After an initial wave of Chinese steel, he said EU anti-dumping regulations simply relocated Chinese investment to Indonesia, Malaysia and Vietnam. Today the OECD estimates global steel overcapacity at 700 million tonnes – roughly five times annual EU consumption.
EU production is running below 70% capacity utilisation, a threshold below which plants start losing money. Three of the four worst years in European steel production history are 2023, 2024, and 2025.
Aiello claimed other downstream sectors in the EU construction and manufacturing value chain are now going through the same cycle, while Hovorka described the current market conditions in Europe as stalled, saying there needs to be a stimulus of sorts. “I think we need cheaper loans for a certain period of time,” he said – enough to restart the engine.
[BM]
