How housing might change in the future – and who can afford it

How will we actually live in the future? Will our homes be climate-smart, connected and full of new technology – or do they risk becoming so expensive that only some people can afford them? A new research study shows that the building industry faces crucial choices that could have major consequences, both for society as a whole and for people’s everyday lives.

The international study, conducted by Ignat Kulkov, affiliated researcher in the DigiCircle (Digital and Circular Industrial Services) research group at MDU and project researcher at Åbo Akademi University in Finland, among others, analyses the building industry in Europe and how it might develop up to 2040. The findings point to four possible futures.

The building sector is one of the largest sources of climate emissions in Europe. At the same time, there is a housing shortage in many cities, and the costs of new construction have risen sharply. This means the industry is under pressure from several directions simultaneously. A key insight from the study is that there is no simple solution. Building more sustainably, for example, may entail higher costs, at least in the short term. At the same time, cheaper construction risks leading to poorer quality or a greater climate impact.

It is therefore a balancing act – where political decisions, technological development and economic drivers together determine the direction of development, says Ignat Kulkov.

Four possible futures

The study presents four future scenarios that illustrate how different priorities can lead to entirely different societies.

• In one scenario, large technology companies play an increasingly significant role in construction. Buildings are mass-produced and sold as services rather than as products. This could make construction faster and more efficient – but it could also concentrate power in the hands of a few players.
• In another scenario, sustainability takes centre stage. Here, materials are reused on a large scale and buildings are designed to be dismantled and rebuilt. The climate impact is significantly reduced, but costs risk becoming higher.
• A third alternative is for the state to step in and take a more active role in housing construction. This could make it easier to ensure that more people have access to housing – but could at the same time reduce flexibility and innovation in the sector.
• The fourth scenario is based on rapid developments in the energy sector. With cheap, fossil-free energy, the rules of the game change, and the focus shifts from the buildings themselves to how energy systems function.

Depending on the choices we make today

Although the scenarios deal with major systemic issues, they have very concrete consequences for people’s everyday lives. How we live – and what we can afford – is directly affected.

This could mean, for example, that more people switch from owning to renting their homes, or that homes become more technology-driven and connected. It could also mean that climate-smart materials and solutions become the norm. But it all depends entirely on the choices made today, says Ignat Kulkov, highlighting three crucial questions that will shape the future:

1. Who should drive development – the market, the state or new partnerships?
2. Which solutions should be prioritised – technical innovation, circular material regimes or energy systems?
3. How should the costs of the transition be distributed?

The answers will not only determine how the building industry develops, but also what our cities will look like, how sustainable they will be, and who can afford to live there. It is easy to view housing as something static – four walls and a roof. But in reality, it is part of a much larger system, where climate, economy, technology and politics intersect. That is also why the building industry plays such a crucial role in the transition to a more sustainable society. How we build today affects not only tomorrow’s emissions – but also how we live our lives for a long time to come, says Ignat Kulkov.

A more long-term and flexible approach

The study shows that all stakeholders in the building industry – from architects and construction companies to homebuyers and decision-makers – need to adapt to a more uncertain and rapidly changing future.

A key recommendation is to adopt a more long-term and flexible approach, where investments, regulations and consumer choices are designed to function across multiple possible development pathways. At the same time, the study emphasises the importance of combining climate sustainability with economic accessibility, to avoid widening gaps in the housing market. For market players, this involves developing new business models and technical solutions, whilst policymakers need to establish stable and clear rules. Homebuyers are also identified as a key part of the transition, by demanding sustainable and resource-efficient housing.

Together, these choices will determine what the homes of the future will look like – and who can actually afford to live in them, says Ignat Kulkov.