The cost of housing in Greece is burning - How much income goes to rent - Economic Postman - ot.gr

In Greece, the average percentage of housing expenses relative to declared income is about 28% when excluding mortgage loans, and it rises to 32% when including mortgage payments. This is the second highest figure among the eleven leading economies in the Eurozone, surpassing even countries like Germany, the Netherlands, and France, where average incomes are significantly higher. In absolute terms, the average monthly housing cost in Greece is approximately 400 euros without a mortgage and 600 euros with one.

According to data from the European Central Bank (ECB) published the day before, the housing situation in Europe is becoming increasingly complicated: loans, taxes, and housing maintenance costs significantly increase the overall expenses. This information pertains to January 2024. Housing costs include rent, mortgage payments, and utilities such as electricity, gas, and water.

According to data from the ECB, housing costs are continuously rising for households in the eurozone, including Greece, due to increasing mortgage rates, high rental prices, and rising utility tariffs. According to the ECB's estimates, housing expenses in the eurozone have increased by10.2%since July 2022, when the interest rate hikes began.

The number of payment delays from households is increasing. All these factors are leading to a rise in the number of households in the euro area expecting delays in meeting obligations such as rent, bills, or loans, the ECB emphasizes. The share of such households has increased to20%According to data from January 2024, what is higher than15%In 2023, the figure nearly doubled and reached almost30%among those who express concerns about delays in mortgage loans.

This data is presented in the ECB report titled "What is the housing burden on households? Data from the ECB Consumer Expectations Survey." The report covers the eleven largest economies in the eurozone, as can be seen in the graphs presented by the financial magazine.

Since July 2022, when the cycle of interest rate hikes began, average housing costs have increased by approximately until January 2024.10.2%while the harmonized consumer price index increased by only5.5%for the same period, according to the ECB. At the same time, total expenses increased by about6%for homeowners and on12%and9%Accordingly, for mortgage holders and renters.

For mortgage holders, the main reason for the increase in costs has been the rising payments on loans, driven by the high level of interest rates on existing mortgage loans with floating fixed rates. As for renters, their expenses largely follow the rental market and trends in utility prices, as renters have less ability to cope with unexpected costs, notes the ECB.

The cost of housing consumes about20%disposable income for owners,40%for tenants and35%For those who are paying a mortgage. Eurostat considers a household to be heavily burdened if its housing costs account for40%and more from income.

The level of burden on households varies depending on income levels. In the lowest category, more than60%Households are feeling a significant strain, especially if they are renting. Among higher-income households, most of those with a mortgage are also facing difficulties in repaying their debts.

On average, housing expenses in the Eurozone countries amount to about20%from the disposable income of the owners,40%for tenants and35%for those who are paying a mortgage, according to the ECB. However, this percentage varies among income groups; the share of housing expenses has slightly increased for20%households with high incomes among those who have mortgage loans and renters. This figure, as it turns out, remains quite stable for the lower ones.50%households.

This difference reflects, on one hand, that high-income households are more likely to take out mortgages, and usually for larger amounts, while on the other hand, there is a stronger increase in income among low-income households. This can be partially explained by targeted income support measures implemented by the governments of Eurozone countries, conclude the authors of the economic bulletin, Omirios Kuvas and Desislava Rusinova.