February 5, 2023

Athens News

News in English from Greece

Up to 70% of the salary goes only to rent

Greece’s housing crisis is on the rise, with rental prices “out of control” in recent years as citizens spend months looking for housing they can afford.

Themis Bakas, President of the Pan-Hellenic E-Real Estates Network, speaks of a cumulative price increase from 2018 to date, reaching around 44.6% in Athens and 32% in Thessaloniki. Speaking on the ERT channel about the main reasons for the rise in real estate prices, the expert noted that the main reason is rise in construction costs. “Over the past two or three years, we see that we have an increase in construction even by 20-25%. Next, we have an increase in sales prices and compensatory rates for plots,” he added. Referring to the high demand and low availability of new buildings, he stressed that their value is also growing due to increased investment interest.

“Over the past 3-4 years, at least it has become clear how many foreigners have shown a desire to invest in real estate in our country,” he added.

Very few Greeks have the savings to take out a mortgage. Another an aggravating factor in rent growth is a small number of approved mortgages. This means no new mortgages are being issued, and a high down payment is required when buying a home, which is up to 30% of its market value. “Therefore, a very small percentage of Greek savers have savings after 10 years of MOUs so that they can start the process of buying a house through bank lending,” he said. “We have seen a decrease in construction activity of even 95% during the MOUs.”

9 + 1 Reasons Why Rent Has Increased

1. Freezing of construction in previous years.

2. The role of banks.

3. Reducing construction activity in general.

4. Auctions.

5. Reduction of households (preference for rent).

6. Cumulative demand/low housing affordability.

7. Loss of purchasing power.

8. Lack of job security (rising unemployment).

9. Short term rental.

10. Lack of a comprehensive housing policy plan.

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