High housing costs in Greece

High housing costs in Greece
High housing costs in Greece

The Greeks are the “champions” of the EU in housing costs according to the data of the Bank of Greece.

According to the Financial Stability Report, the percentage of income that Greeks spend on housing is the highest in the EU and reached 34.2% in 2022 (followed by the Netherlands, Denmark and Germany), when the rest of Europe they spend an average of 19.9%.

Another negative first is that of the excessive burden due to housing costs. In 2022, 27% of the country’s population shouldered housing costs that accounted for more than 40% of their disposable income, when the corresponding percentage of the population in the euro area was 9.4%.

With reference to real estate prices, the Bank of Greece estimates that there is room for further growth despite their significant increase in recent years. And this is because housing prices in Greece are still far from the historic high recorded before the financial crisis of 2008. The highest value of the index was observed in the year 2008 (101.7) and then followed a steady downward path, to be recorded the lowest price in 2017 (59). The evolution of the level of rents is similar, with the relative index being 98.5 based on the data of the third quarter of 2023, against 94.8 in the fourth quarter of 2022. The rent index, in contrast to house price index, remains significantly lower than the highest value it has received historically (124.3 in the 3rd quarter of 2011).

In the second quarter of 2023, the prices of new apartments (up to 5 years old) increased at an average annual rate of 13.8%, while the prices of old apartments increased by 14.1%. The increases in the urban centers are of course greater, since in Thessaloniki (16.4%) and in other large cities (14.6%) the annual rate of increase in apartment prices exceeded the corresponding average rate of increase for the whole country.

Despite the continued increase in prices, the increase in demand for housing loans remains moderate. According to the figures of the Central Bank, the disbursements of loans secured by residential properties amounted to 507.8 million euros in the first half of 2023, increased by 1.8% compared to the corresponding period last year and remain low both in absolute terms and in compared to the level before the global crisis. Loan disbursements secured by residential properties amounted to 241.5 million euros, down 10.7% compared to the second quarter of 2022, and 3,097 new loan contracts were signed. In this year’s second quarter, the average loan disbursement amounted to 78 thousand euros. euro. It should be noted that the market share of the four major credit institutions in terms of loan disbursements secured by residential properties amounted to 91.5%.

The article is in Greek


Tags: High housing costs Greece


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