Prices in Europe are falling, but in Greece they are soaring

New report ΕΛΣΤΑΤ about poverty and material deprivation of the inhabitants of Greece proves that every second resident experiences difficulties paying rent, loans and fixed bills.

Contrary once again to the Prime Minister's claims about the “amazing quality of life” in Greece, a new report from ΕΛΣΤΑΤ shows that 8 out of 10 Greeks live in poverty.

New numbers complements previous Eurostat studiesaccording to which the inhabitants of Greek cities are the most burdened among all Europeans: almost one in three households pays more than 40% of their disposable income on rent, loans and bills. The corresponding figure for the average population of European cities is 10.4%, which demonstrates the size of the gap separating us from the rest of Europe.

A new slap in the face was Eurostat data on the course of house prices for the 4th quarter of 2023, which increased by EU by 0.2% (compared to the corresponding quarter in 2022), while in the euro area they decreased by 1.1%. The Eurostat report does not include data for Greece, which shows dizzying deviations from the European average. In the fourth quarter of 2023, apartment prices in Greece (in nominal terms) increased by an average of 11.8% compared to the corresponding quarter of 2022, while for the whole of 2023 they increased by an average of 13.4%, against an increase of 11.9% in 2022.

Eurostat reports that house prices fell 6.3% in the EU in 2023 and 6.8% in the eurozone, while in Greece they rose 8.3% – the fastest pace since 2018. they started to grow again.

This indicator characterizes Hellas as the country with the fastest rising house prices in the entire EU. Croatia is next with prices rising by 3.7%, followed by Portugal with 3%, Bulgaria with 2.8% and Lithuania with 1.1%, while prices in all other countries are falling, with Germany in first place (-13 ,9%).

The evolution of house prices in Greece, according to the Bank of Greece, was strongly influenced by the crisis – a very large drop from 2008 to 2017 – despite a simultaneous vertical decline in housing construction from 2005 to the present day, according to ELSTAT. Starting in 2017, prices followed an upward trend with some slowdown due to the pandemic and reached 2008 levels again in 2023.

The most important element of this development is the fact that the rise in housing prices is not at all due to an increase in domestic demand. Conversely, the increase in sales/rental prices does not correspond to the income of domestic households, which remain at the same level. A significant increase in the cost of housing is associated with the massive transformation of housing into an investment product, the catalyst of which is the demand for housing from tourism. The critical situation that the housing crisis has reached is, to a very large extent, due to the lack of policies to regulate the real estate market.

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