Just look at Europe’s brewing housing problems, which are only just beginning.

Story: Meet Milena and Manuel David from Dusseldorf, who were this close to trading their sardine-can apartment for a house—until the cruel roulette of mortgage rates and building costs spun out of control. The rate tripled; their costs skyrocketed by €85,000 (USD$90,000, or 1M Kinder Eggs), and just like that, their dreams folded faster than Superman on laundry day.

This isn’t just their bad luck. It’s a continental trend. Germany’s new building permits are down a staggering 27% in the first half of 2023. France? Down 28% through July. And the Brits? They’re bracing for a 25% plummet in homebuilding. Can’t find a flat in London? Try Hogwarts maybe.

Even Sweden, normally so cool and composed, is having its worst slump since ABBA’s last tour, with building rates at a measly third of what's needed. If only there were a magical Allen key that could solve this one.

Part of the problem is additional red tape imposed on builders related to mandatory energy efficiency targets. That, coupled with rising rates, and increased material costs, make homebuilding unprofitable, except in the luxury segment.

Tell Me More: Germany's biggest landlord, Vonovia SE, has folded its construction hand indefinitely. In Sweden, a project vital for cutting the region's dependency on Chinese battery cells is short-circuiting because workers can't find a place to live. Meanwhile, governments are reneging on their promises: Sweden’s constitutional vow of affordable housing is about as reliable as a chocolate teapot, the UK is missing its 300,000 houses-a-year target by a country mile, and Germany? Chancellor Scholz's coalition might as well be trying to build castles in the sky with their 400,000 new homes annual goal. Experts predict this goal may be reached by 2026, but don’t hold your breath.

Governments are gingerly proposing reforms. The UK’s Labour Party is waving around a 1.5 million homes plan, Portugal is trying similar policies, and Germany is pledging to streamline the rules while their building permits continue to nosedive faster than a lead balloon.

So What: Europe's housing market is like a game of high-stakes poker, but for most, the chips are down, and the bluff’s been called. And in this game, it’s not just the Davids of Dusseldorf feeling the pinch—it's a full house of dismay.

And we thought we had it bad in North America.