Housing costs have become an unbearable burden for both Greek citizens and most Eurozone households. High increases in mortgage repayments due to high interest rates, skyrocketing rents and the high cost of living due to inflation, combined with persistently low wages, especially in Greece, form an explosive cocktail, exacerbating the housing crisis in all of Europe.
Indeed, according to recent data from the ECB, in Greece, compared to other European countries, citizens spend the largest percentage of their income on housing. In particular, despite the fact that Greece is in nominal terms the second cheapest country in the EU, as compared to other countries it has extremely affordable real estate prices for foreigners, if the income of Greek households is taken into account, then it is considered the second most expensive country to live in.
Specifically, according to Eurostat Greeks spend 34% of their salary, while the European average is 20%. As reported by the ECB, the total housing burden of Greeks is calculated on average at 400 euros per month if housing loans are excluded. Together with mortgages, this average cost rises to 600 euros.
It is noteworthy, however, that between 2017, when house prices in Greece had reached historically low levels, and 2022, the real disposable income of citizens increased by a total of 12%. While in the same period in Europe the average income increased by only 6%.
Of course, from 2017, when the recovery of the housing market began, and until the end of 2023, prices in Attica had recorded a total increase of 80%. Accordingly, in the country as a whole the increase reached 61%. However, in the first months of 2024, prices in Attica returned to their previous high, which was recorded at the end of 2007 and the beginning of 2008, that is, before the country’s debt crisis broke out.
This means that from 2024 onwards – and given that prices continue to move strongly upwards – the Greek real estate market enters “uncharted waters”, as values will now be at a historically high level and indeed for a prolonged period of time, at least until there is some significant correction. Despite all this, adjusted gross disposable income per capita in Greece still remains at €17,482 per year, placing Greece last in the EU27.
Things aren’t any better abroad, however, as despite higher earnings for European citizens, the ECB reports that the proportion of households late paying rent or bills has risen to 20% based on January 2024 figures, from around 15% in 2023. Also, the percentage of households in arrears on mortgage payments has doubled. In fact, the average cost of housing in the EU is estimated to have risen by 10.2% since July 2022, when interest rate rises began.
In addition to Greece, the Nordic countries also spend more than 30% of their income on housing, followed by Denmark and Iceland, where the average household spends 28%. Central and Eastern Europe fares better, as in countries such as, for example, Croatia, Bulgaria, the Czech Republic and Slovenia, citizens spend just over 10% of their salary on rent, while the least housing is held by Maltese households, who spend just 3%.
Source: powergame
news today
