Sturunaras: Expensive rent aggravates demographic crisis

Yannis Stourunaras stated that expensive real estate in Greece aggravates demographic crisis And prevents young people from starting families.

Expensive real estate in Greece has already become not only a social, but also a demographic problem. The head stated this Bank of Greece Yannis Stourunarasspeaking at a conference Central Bank of Croatia V Dubrovnik. According to him, the high cost of housing delays the creation of new households, especially among young people, and intensifies the country’s demographic crisis.

As stated in the official speech of the head Bank of Greecehousing affordability in Greece has become one of the key factors influencing long-term demographic trends. Sturunaras noted that limited access to affordable housing is forcing many young adults to stay in their parents’ home longer than they would like, and some people are postponing or reconsidering the decision to start a family. This was reported in a publication by the Bank of Greece.

According to Sturunarasathe high housing cost burden for Greek households remains one of the highest in eurozone. And this is no longer just a matter of renting or buying an apartment. When a young couple can’t afford their own place, talking about children, stability and family planning becomes a nice theory for conferences where, fortunately for the participants, their own rent is usually not discussed.

Chapter Bank of Greece linked the housing crisis to the broader problem of aging and population decline. A shrinking and aging population is shrinking the size of the workforce, weighing on long-term growth potential and increasing pressure on public finances, he said. In other words, an expensive roof over your head today turns into an economic hole tomorrow.

Real estate is purchased not through a mortgage, but from savings

Separately Sturunaras drew attention to the structure of financing of the real estate market. According to Bank of Greecethe purchase of housing in the country is increasingly financed not through mortgage loans, but through the savings of the buyers themselves. This means that a significant part of transactions depends on the capital already accumulated, and not on the availability of bank lending.

“A significant share of transactions are financed through household savings rather than bank lending,” noted Sturunaras. He said this reinforces the assessment that housing demand in Greece is not too sensitive to interest rates, with many buyers using already accumulated wealth to purchase properties rather than applying for a mortgage.

This is an important signal for the market. If apartments are bought mainly by those who already have money, then raising rates in itself does not necessarily cool down demand. But young families and people without large savings remain outside the market door. It’s very convenient: housing seems to be for sale, the market seems to be active, but living in this market activity is becoming increasingly difficult.

Demand remains strong

According to the head Bank of Greecedemand for real estate in the country remains stable. It is supported by both internal factors – a gradual increase in disposable income, improving economic expectations and government measures to support housing – and external factors: foreign investment, growing tourist flows in cities and the perception of real estate as a relatively safe asset.

This is where the main conflict arises. For an investor, housing is an asset. For the tourism market it is a source of income. For the state – a sector of the economy. And for a young family – a place where you can start an independent life. When the first three logics win over the fourth, the country gets beautiful transaction statistics and an increasingly empty demographic perspective.

Stourunaras acknowledged that the government is already taking measures to alleviate the housing problem: subsidized mortgages, first home support programs and strengthening social housing policies. However, he said such measures take time and pressure on housing affordability is likely to continue in the short term. The same line was conveyed by Greek economic publications, including Kathimerini And Insider.

Why is this important for Greece

The housing crisis in Greece cannot be seen separately from demographics. If young people cannot move away from their parents, if rent eats up a significant part of their salary, if buying a home turns into a privilege for those who already have capital, then government talk about supporting families begins to sound empty. A family is not created in a PowerPoint presentation. She needs an apartment, income and a sense of tomorrow.

The problem is especially acute against the backdrop of data on consumer expectations: Greek households are already feeling strong price pressure, expect spending to rise and do not believe in a noticeable improvement in income. In such a situation, high housing costs become not just part of inflationary pressure, but a factor that changes people’s life decisions.

Editorial comment

Statement Sturunarasa What’s important is that it actually states the obvious: The housing crisis in Greece has long gone beyond the real estate market. This is already a question of demography, social sustainability and the future economy. A country cannot simultaneously complain about low birth rates and build a market where a young family must first win a savings lottery in order to simply start living on their own.

The situation looks especially cynical when real estate is increasingly perceived as an investment asset, rather than as a basic human need. Foreign money, tourism, short-term rentals and buying apartments with savings support prices, but do not solve the problem of those who work, pay taxes and want to live in their own country, and not in their parents’ room until they are forty.

The government can launch subsidized mortgage programs as much as it wants, but if the supply of affordable housing remains limited and prices rise faster than real incomes, these measures will be more of a Band-Aid. The demographic crisis begins not only in maternity hospitals. It starts in rental ads, in bank refusals, in wages that won’t keep up with the market, and in a generation that is being asked to start families without space to live.

Source link