Real estate prices are in full swing to house-mortal highs, throwing thousands of households into despair who are simply unable to bear the brunt of housing costs, especially at this time when electricity and heating costs look daunting.
The problem is becoming more acute as the supply of long-term rental housing is reduced due to the growth in income from short-term rentals, the trend of which has recovered significantly from the pandemic and travel restrictions.
The level of property ownership in Greece is higher than in other countries, especially in Northern Europe, but the myth of the “roof” over the head of every Greek (ownership of each inhabitant of the country’s own housing) has long been dispelled. The figures show that about 25%, or about 1.2 million households live in rented housing and therefore subject to market trends. Especially for young people, owning a home becomes even more difficult as the phase of aggressive interest rate hikes arrives.
The real estate agency figures even show double-digit rent growth, and not just in areas that could be described as “selective”. According to the index, which measures the ratio of the nominal value of real estate to the rental price, we have come out of the lows of the period of 2012-2017 and are moving towards the highs of the period of 2007-2008.
The latest data on income from short-term rentals is also problematic. For a three-room apartment near Syntagma, the price per day is 150 euros, which means that with an average occupancy of 10-15 days a month, the owner’s “turnover” is from 1500 to 2250 euros! One-bedroom apartment in Exarchia costs 85 euros per day, therefore, with the appropriate occupancy, it turns out 850-1275 euros. How easy is it for the owners in question to forego such income and give their property on a long-term lease?
Europe saw new strong demand and average daily rates for short-term rentals over the summer, according to AirDNA data compiled by BNBnews. Overnight stays in the June-August quarter increased by 3.5% compared to 2019 and nearly 36% compared to 2021 during this very challenging time of high prices and uncertainty.
During the strongest holiday month on record, August, short-term rental income in Europe increased by 16.7% compared to the same month in 2019 and by 30.1% compared to 2021. This was helped by the continued rise in ADR (average daily price), which this month was 1.2% higher than in 2021 and 16.5% higher than in 2019.
Of the many housing policies announced by the relevant ministries, three stand out as “urgent”:
- Provision of mortgage loans up to 150,000 euros for the first houses (real estate up to 120 sq.m. with a year of construction until 2007). The program budget is 500 million euros and covers 10,000 young people under the age of 39 with income criteria. The loan will be completely interest-free (in the presence of 3 children or large families). The program will begin in the first quarter of 2023.
- Program “Κάλυψη”. Use of more than 1,000 affordable private properties that the government will renovate and then transfer to vulnerable social groups, primarily large, single-parent families with three children (at very low rents).
- European grant of 200 million euros to join the program of already existing empty private houses. Massive renovation and energy upgrades of 4,000 long-vacant properties. These properties will be available at low rent for 5 years or more to 10,000 young people and couples aged 25 to 39 based on social criteria. This measure will benefit both the young people who will be housed in them and the property owners who will provide a guaranteed income as well as the modernization of their property.