Greece Housing Price Spike Makes Ownership Elusive
Following a period of declining property valuations and rents due to the protracted financial crisis, house prices and rents have rebounded significantly: according to the Bank of Greece, house prices in the Attica region have risen almost 70% since 2018, while rents are up between 35% and 50% in most areas, putting pressure both on those seeking their first rental and those who must, for a variety of reasons, look for a new one. Many landlords also demand big rent increases when the contract comes for renewal and this has been exacerbated by the spike in inflation, as they think they can make up for all so-called lost income over several months or more. Research by Potamianos Real Estate Group, which involves actual contracts and not asking prices in classifieds, shows the average rent is currently €7.90 per square meter, almost 35% up on 2017. In some districts close to central Athens, such as Kypseli and Pangrati, as well as in the port of Piraeus, price hikes from 2017 to end-2022 exceeded 50%. Many living on rent are faced with the reality that they may never have enough money to achieve home ownership, because mortgage installments may be out of their reach. Data from EU statistics agency Eurostat show that those in Greece who face an inordinate burden to pay for housing reach 32.4% of urban dwellers, compared to 21.9% in Denmark and 15.3% in the Netherlands. Also, 74.2% of Greek renters spend over 40% of available income on rent and basic necessities. In 2021, 36.4% of adults were in arrears on their rent, mortgage and utility bills. Conditions are even less favorable for the 416,608 single-member households where no second income is available. For those who dare to take out a mortgage, prices in central Athens for flats, often over 35 years old, with few amenities and little or no insulation, average €1,780 per square meter, that is, almost €180,000 for a 100 square meter flat. In Attica overall, average prices exceed €2,000 per square meter. Paying off the mortgage demands considerable liquidity.
Tags : declining property valuations rents financial crisis house prices Bank of Greece Attica landlords demand contract renewal Potamianos Real Estate Group EU statistics agency Eurostat