Housing crisis: The rapid increase in real estate rental and sale prices “burdens” households

Rapid increase in rental and sale prices real estate and a decrease in owner-occupation by 102,695 homes, finds a survey by the Panhellenic E-Real Estates Network, and based on Eurostat data, referring to housing crisis in GREECE. As mentioned in the relevant analysis, housing costs are now a problem for all European countries. According to Eurostat, between 2010 and the second quarter of 2022, rents increased by 21% in the European Union. We remind you that the recent report of the SC spoke, among other things, about great burden on householdsas housing costs as a percentage of household disposable income in Greece was set at 34.2% for 2022, compared to 19.9% ​​on average for Europe of 27.

Steadily increasing rents in the EU

According to the research of the Panhellenic E-Real Estates Network, in the second quarter of 2023, the rents in the EU increased by 0.7% compared to the previous quarter. The rents were against 3% more expensive on average compared to the same period last year. The numbers show a steadily increasing rate every quarter. In the last quarter of 2022 rents increased by 2.5% annually and in the first quarter of 2023 they increased by 2.9%.

Many countries in Europe are implementing expanded housing policies, creating social housing for decadess, while, due to the conditions that developed especially from 2018-2019, they have made adoption of new measures aimed at curbing housing costs.

At the same time, apart from the new housing policies they implement, they imposed ceiling on rent increases due to a rapid increase in inflation and at the same time they included new housing policy plans in the Recovery Fund.

Skyrocketing rents in Greece – One salary the cost of housing

According to the president of the network, Mr. Themistoklis Baka, in our country the cumulative increase in rents from 2018 to 2022 ranged from 37.2% to 42.1% if it concerns a residence suitable for a family. Higher increases are mainly recorded in smaller properties suitable for students. Specifically, according to recently published data, asking rental prices for student housing and/or housing suitable for young people increased by 53% in Athens and Patras, where the 2nd largest increase of 49.23% is recorded in the period 2017-2022, while this year an additional average increase of 8%-12% is recorded. In 2022, asking rent growth for family-friendly properties averaged 10%from 3% to 7% recorded in 2021. While, this year expected new average increases of 6%-10%.

The cost of housing in Greece has soared to such levels that it touches the 60%-70% of the average monthly salary and if it is a family residence the total of a “good” salary. Much of our fellow citizens are forced to do cuts, even to his basic needs. According to a recent survey, 76.9% of renters cut back on essentials or receive financial assistance from third parties once they pay their housing costs.

According to Eurostat, our country is a champion in housing costs in all Eurozone countries, both for those living in urban centers and for those living in rural areas. Alongside, 36.9% of Greeks live in households with arrears on mortgages, rents or utility bills. Arrears on mortgage, rent, or utility bills are another sign that housing costs may be too high.

Rapid increase in sales prices – Attica +71.1%

As noted, “between 2010 and the second quarter of 2023, house sales prices increased by 46% in the European Union, according to Eurostat. In our country, the sale prices of houses increased from 2017 to the second quarter of 2023 by 71.1% in Attica and by 53.8% nationwide. In many cases the sale prices in Attica are reduced by 5.3% compared to 2008 which is the year with the highest price point.

An important factor in the rapid increase in sales prices is ever-increasing construction costs. Construction costs from €1,000/sq.m. – €1,200/sq.m. without calculating the cost of the plot a few years ago, it now reaches €1,500/sq.m. -€1,700/sq.m., i.e. an increase of 50%-60%”.

Decrease in disposable income

As Mr. Bakas mentions, in contrast to the rapid increase in asking sales and rental prices, according to Eurostat, Greeks had the fifth lowest disposable income in 2022, higher only than that of some Eastern European countries. According to data, the median disposable income of Greeks stood at 10,841 purchasing power units (PPS), higher only than that of Bulgarians (9,671 PPS), Slovaks (9,826), Romanians (10,033) and Hungarians (10,217).

In any case, Greece is far from the EU average. which last year amounted to 19,083 euros or 18,706 PPS, at a time when 26.3% of the population in 2022 was at risk of poverty or social exclusion according to the Hellenic Statistical Authority (ELSTAT).