How housing problems are aggravating the demographic crisis

Demographic changes in all countries are one of the parameters that influence, among other things, the living conditions of younger generations. On the other hand, they can influence both the age at which a family is created and the number of children.

In our country, according to the Institute for Demographic Research, where in recent years people aged 25-45 have faced increasing housing difficulties, it can be assumed that demographic trends are to a certain extent responsible for these difficulties.

This could happen if there were a sharp increase in the number of people aged 25–45 over a very short period of time, leading to an “explosion” in demand. In Greece, however, we had the opposite, that is, a significant reduction of this group by 850 thousand people between 2009 and 2024 (-25%).

This is according to the latest digital newsletter from the Institute for Demographic and Research Studies (IDEM) on the topic “Demographic changes and the housing crisis in Greece.”

The author of the article, Professor Vyronas Kotsamanis, head of IDEM, after summarizing the important changes that have occurred since 2010, their impact on the younger generation and how these generations are adapting to rising housing prices, assesses that “The rapidly growing disparity between the prices of buying or renting a first home and the incomes of the majority of young people who do not live in their own or rented home is having an impact not only on starting a family, but also on the number of children this generation will have as a whole“.

In particular, the author of this article mentions that “in the period after 2010, we have had successive crises that have had multiple impacts on the younger generation, while housing lending (i.e. the number of housing loans estimated at only 13 thousand in 2023 year) and investment in housing declined significantly.

In particular, in recent years, he notes, we have seen not only growing demand for housing from foreigners, but also for short-term rentalswhich is associated with aging housing stock and limited supply of new housing.

Which, as the director of the Institute for Demographic Research emphasizes, also led to a decrease in the ownership rate at the national level by 4.5 points according to Eurostat (from 74.0 in 2014 to 69.6 in 2023).

However, recently the situation has led to a rapid increase in both the prices for purchasing housing (new or not) and rent. And the growing discrepancy between the cost of rent and the income of those young people who do not live in their own home or housing donated by previous generations has led to the emergence of the current housing crisis.

Those young people who did not emigrate and remained in our country, notes Mr. Kotsamanis, have partially adapted to this new situation.

This resulted in those who were able to live with their parents doing so. As a result, the percentage of young people aged 18–34 living in their parents' home has increased rapidly (by 12 percentage points between 2010 and 2022).

So today in Greece one of the highest percentages of young people living with parents among EU countries (almost 72% compared to 50% on average EU) and, at the same time, the highest age of leaving the parental home (>30.5 years).

The other part of the younger generation, according to the expert, who did not have such an opportunity, adapted by renting housing, which now absorbs a significant and growing part of their income. However, in both cases, if we take into account other negative parameters, there will be a cumulative effect not only in terms of “postponing” starting a family, but also on the number of children.

To cope with the housing crisis, which is now becoming a “mega-problem” mainly for young couples, the director of IDEM proposes to implement an expanded program provision of social housing and create a body to implement targeted public housing interventions.

Mr. Kotsamanis also noted that in order to solve the housing problem in recent years, in addition to rental subsidies for households with very low incomes, the government has taken other positive measures, such as the “Το σπίτι μου”, “Στέγαση και Εργασία” programs. , “Κάλυψη”,και “Ανακαινίζω- Ενοικιάζω”.

However, he said, these programs have very limited budgets and the number of beneficiaries. Therefore, given the current serious situation, do not solve the acute housing problem of young people.

Mr. Kotsamanis believes that what is now necessary is the creation and implementation of an extensive low-cost rental housing programs similar to those that have existed for decades in many European countries.

Social housing should be among the priorities of government, local authorities and social organizations. The rapid implementation of such a program, he notes, will finally “mitigate the negative impact of the housing crisis on demographics.”

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