Across the EU, housing supply is failing to keep pace with demand. Construction costs, skills shortages, and a slowdown in building activity are increasing purchase prices and rents for millions of households, putting pressure especially on those reliant on social housing.

This report examines how offsite construction methods, including prefabrication, modularisation, and industrialised renovation with ventilated façades, can deliver more affordable, lower-carbon homes at scale. Drawing on analysis of France, Germany, and the EU as a whole, it shows that shifting from onsite to offsite delivery can reduce purchase prices by around 30% in France and 22% in Germany, dramatically cutting housing cost overburden rates among new homeowners.

For social housing, offsite methods could lower cost-based rents by around 12% and close Europe’s gap of approximately 13 million units around five years sooner than conventional approaches. Renovation solutions, including prefabricated ventilated façades, further reduce energy demand, improve indoor comfort, and support circularity.

Including offsite construction in Energy Performance of Buildings Directive and Energy Efficiency Directive implementation could accelerate delivery of zero-emission buildings and deep renovation at scale. Directing affordable housing finance towards industrialised methods would lower costs for the households who need it most. Using public procurement to create stable, long-term demand for offsite solutions would give the construction sector the confidence to invest and innovate. Offsite construction can provide a solution to Europe’s housing and climate crises, but only if policy frameworks help its rollout at scale.