34.2 % Greeks spend income on rent: expensive housing costs in the EU

The ratio of housing costs to affordable household income in Greece was 34.2% in 2022, compared to an average of 19.9% for the 27 EU countries.

Expectations for Greece's residential market remain positive despite uncertainty in the domestic and global economy. In the short term, investment interest, especially from foreign investors, is expected to be intense, especially in the privileged zones of Attica and regions with tourism potential. In the medium term, initiatives to support certain categories of households (e.g., youth, vulnerable social groups) to purchase housing are expected to help stimulate demand, and similar initiatives to renovate old houses will help improve the condition of the housing stock. However, it is noted that the residential real estate market in many European Union countries is already on the way to a significant adjustment in terms of the number of transactions, prices and yields.

The article notes that Greece ranks unfavorably among European countries in terms of housing costs, as the cost of housing as a percentage of affordable household income is 34.2% in 2022, compared to an average of 19.9% for the 27 EU countries. This is due to low individual income compared to other European Union countries.

The program "Σπίτι μου "

The "Σπίτι μου" program, which provides low-interest or interest-free loans from banks to young people or young families for the purchase of a first dwelling with co-financing from the State Employment Service (Δημόσια Υπηρεσία Απασχόλησης, Δ.ΥΠ.Α.), was created in December 2022 by Law 5006/2022 (GOS 239/22-12-2022). The program is part of a broad housing policy for youth, including working with the private sector to use public properties to rent them out at controlled rents, and increasing affordable housing stock by subsidizing the renovation of vacant houses and apartments for use as housing.

Thereafter, the legal and technical due diligence of the property begins and must be completed within sixty (60) days from the date of application to the program. The maximum period to enter into an agreement and receive a loan is six (6) months from the date of application to the program, with an option to extend for two (2) additional months. After this deadline, the request is canceled and the budget is released. Media according to Δ.ΥΠ.Α. the program has generated strong interest, with nearly 40,000 applications submitted since its inception on April 3, 2023. Of these, 23,875 have already received pre-approval and 9,378 have moved to the final approval stage, allocating 742 million. Euros out of a total budget of 750 million. Euro Δ.ΥΠ.Α.

Other information

• The majority of mortgage loans (96.8%) are for the purchase of owner-occupied housing, while only 3.2% of loans are for residential rental properties.
• Almost all new loans are fully covered by mortgages.
• The majority of loans have a long fixed interest rate term, protecting borrowers from further rises in prime rates. Loans with fixed-rate terms over 10 years account for 59% of all new loans, and loans with fixed-rate terms between 5 and 10 years account for 19%. Only 7.4% of all new loans have a fixed-rate term of less than 1 year.
• The average duration of a loan is 24 years. 21.9% of loans have terms up to 15 years, 37.5% have terms between 15 and 25 years, 34.6% have terms between 25 and 30 years, and the remaining 5.9% have terms longer than 30 years.
• In the spring of 2023, Δ.ΥΠ.Α. has noticed the interest it has achieved, with about 40,000 applications filed since it began on April 3, 2023. Of these, 23,875 have already received preliminary approval and 9,378 have moved on to final approval, commanding 742 million euros from the total budget of Δ.ΥΠ.Α. of 750 million euros for the program. Loans totaling €989.5 million were approved, with an average loan size of €105,510.