BoE report: 1 in 3 Greeks spend 40% of their income on housing – What solutions are proposed

The mean stock of household disposable income allocated to lodging expenditure related to rent oregon indebtedness repayment was 23.7% for Greece, compared to an EU mean of 17.9%. This is according to a study by BoE Governor Yiannis Stournaras based connected OECD data. The representation is much melodramatic based connected Eurostat data.

According to Eurostat, the percent of the colonisation spending much than 40% of their disposable income connected lodging costs (housing outgo load index) successful Greece reached 28.9% successful 2024, with the corresponding European mean estimated astatine 8.2%.

Prosperity increases lodging costs

You mightiness not deliberation so, but affluence is 1 of the reasons wherefore lodging costs are rising.
As the study states, the factors driving the accrued request for lodging are linked to some macroeconomic conditions and the structural characteristics of the system and the market.

The gradual betterment successful disposable income successful caller years has boosted home demand. Households are looking for modern lodging to bargain oregon rent, peculiarly successful areas that conscionable higher criteria for infrastructure and prime of the residential environment. At the aforesaid time, the removal of the interior uncertainty that characterized the play of the economical situation and the dependable upward inclination of the existent property marketplace from 2018 onwards person enhanced the attractiveness of lodging arsenic an investment, some for individuals and for companies progressive successful the development, management, and cognition of existent estate.

Rapid maturation successful request for mortgages

The stringent household financing conditions introduced aft the fiscal situation to guarantee the stableness of the banking system, combined with the emergence successful involvement rates successful 2022-23, negatively affected the request for caller loans. However, successful 2023 and particularly successful 2024, an yearly summation successful the fig of caller owe loans granted by recognition institutions was recorded, by 3.9% and 29.6% respectively, to which the “My House” programme contributed.

Although socially successful the close direction, this programme is estimated to person further boosted demand, particularly for older houses and apartments. The precocious grade of urbanisation successful the state and the demographic changes recorded successful the decennary 2011-2018 explicate portion of the accrued request for housing, particularly successful ample municipality centres. Although the country’s colonisation is decreasing some wide (3.1%) and locally successful astir regions, the fig of single-person households is expanding successful each regions.

The reasons for the summation successful demand

Especially successful Attica, wherever the registered colonisation decreased marginally by 0.4%, the fig of households accrued by 8.4%, oregon by 127,300 successful implicit terms, chiefly owed to a 36.9% summation successful azygous idiosyncratic households. This improvement is successful enactment with the lodging unit successful the superior metropolis and astatine the aforesaid clip indicates a displacement successful the characteristics of demand, which is shifting towards residential areas wrong the municipality fabric, perchance of smaller aboveground country than successful the past.

In parallel with the interior request for housing, outer request for residential properties of precocious determination and method specifications has increased. Foreign nonstop concern directed into existent estate, and successful peculiar the Golden Visa program, removed disposable properties from the superior lodging market. At the aforesaid time, the important summation successful tourism successful municipality centres and the improvement of short-term rentals had an expanding interaction connected rents and spot values successful locations of tourer interest.

At the aforesaid time, improvements to the infrastructure and gathering banal successful these locations and the improvement of complementary commercial, edifice and leisure uses person upgraded these areas and further boosted request and location prices. Despite beardown request for housing, a fig of factors are holding backmost the proviso of caller residential properties.

Residential operation activity, which experienced historically precocious maturation rates successful 2001-08, experienced a crisp downturn during the fiscal crisis, with a gradual betterment aft 2020 remaining elusive. Typically, the mean yearly fig of caller gathering permits issued for lodging operation successful 2021-24 is astir 35,000, portion the corresponding mean yearly fig for 2004-08 was astir 125,000 permits. Investment successful lodging (at changeless prices) successful 2024 accounted for 2.6% of Gross Domestic Product (GDP). This fig is importantly beneath the levels recorded earlier the fiscal crisis, arsenic the corresponding fig for 2004-08 is estimated astatine 8.5%.

The ample summation successful operation costs aft 2021, initially owed to problems successful planetary proviso chains and past owed to geopolitical instability, which affected the outgo of vigor and materials arsenic good arsenic the outgo of financing projects, constricted the momentum of operation activity. Business plans for caller spot improvement were postponed oregon rescheduled, portion further operation costs dragged down the values of recently built homes. Finally, predominant changes successful the organization model person a antagonistic interaction connected operation enactment and the proviso of caller properties and trim the attractiveness of the marketplace for caller investments.

In summation to the lag successful the proviso of caller housing, constraints are besides identified successful the availability and suitability of the existing lodging stock. The disposable banal is, to a ample extent, old, outdated and of debased vigor efficiency. In areas with debased request oregon deteriorating characteristics, concern often yields a antagonistic nett return, which discourages owners from leasing vacant properties connected a semipermanent basis. Finally, successful galore cases, multi-tenancy makes it hard to marque decisions astir immoderate signifier of development.

Transfers, particularly of older properties, are importantly affected by the complexity of procedures arsenic good arsenic organization and administrative delays, resulting successful a important fig of homes remaining disconnected the marketplace until legislative and method maturity is achieved. With the digitisation of a ample fig of nationalist services and idiosyncratic legislative regulations, respective steps person been taken towards simplifying procedures, but delays remain.

To the parameters that wounded the proviso of existent property should beryllium added the hold successful the organisation of the registration of existent estate. With the completion of the Cadastre and the related existent property digitisation projects, it is estimated that the transparency of the marketplace volition beryllium enhanced and bureaucracy volition beryllium reduced.