Escalating Costs Push Housing to Crisis Levels
A growing share of Greek households is struggling as housing expenses absorb a significant portion of available income. Despite the end of the bailout era, the financial weight of housing continues to climb, placing many families under sustained pressure.
Housing Consumes 35.5 Percent of Income
In 2024 households spent 35.5 percent of their disposable income on housing. According to Eurostat, this figure ranks among the highest in the European Union, where the average sits at 19.2 percent. Nearly 3 in 10 urban households now allocate more than 40 percent of their income to rent, loans, utilities and property taxes, placing Greece firmly in the category of excessive housing burden.
Overdue Debts Affect 42.8 Percent of Citizens
About 42.8 percent of the population lives in households with overdue obligations, including rent, mortgage payments and utility bills. This sharply contrasts with the EU average of 9.2 percent. Additionally, around 1 in 10 households falls behind on rent or loan payments, while housing quality remains inadequate for lower income groups.
Property Prices Close to 2008 Highs
Home prices are nearing the historic peaks of 2008 despite stagnant income growth. Experts warn that the widening gap between rising housing costs and household budgets is becoming more evident across the country.
Study Details Factors Behind the Crisis
A new study by diaNEOsis and IOBE outlines the roots of the housing crisis. The long financial downturn led to a spike in non performing mortgages, a collapse in real estate values and a buildup of approximately 2.27 million vacant properties nationwide. Many households became trapped in unmanageable debt during this period.
Reduced Construction and Weak Lending Increase Pressure
The freeze in construction activity and contraction of housing credit created a supply shortage that persists despite economic recovery. The Golden Visa program and the surge in short term rentals further reduced long term rental availability in major cities. Meanwhile construction permits for homes rose in 2024 to represent 70 percent of total permits that year.
Energy Crisis Adds More Weight
The energy crisis removed additional income from households and raised construction expenses, costs ultimately passed on to buyers and renters. Renters are particularly strained, with 6 in 10 spending over 40 percent of their earnings on housing. Nearly half of those with mortgages face similar pressure.
Younger Adults and Single Parent Households Hit Hardest
Younger individuals with lower incomes face disproportionate hardship, as do single person and single parent households. Nearly 2 in 3 single parent families exceed the 40 percent housing cost threshold.
Loan Disbursements Drop Sharply
Housing loan disbursements fell to about 1.4 billion euros compared to 15.5 billion euros in 2006. At the same time around 700000 properties remain under restructuring or foreclosure, offering no active housing supply. Census data from 2021 also confirms a large stock of vacant homes, highlighting deep market imbalances.
Recommendations for a Stronger Housing Policy
The study notes that most housing policy efforts currently fall under the Ministry of Social Cohesion and Family. Researchers argue that the ministry should manage the housing budget, design policy strategies, coordinate social housing programs and evaluate outcomes with standardized data. The national digital housing platform stegasi.gov.gr supports this goal by centralizing information and improving transparency.
Expanding Public Housing Initiatives
The study suggests that public land should be developed, renovated or used to build new homes in cooperation with local authorities, following examples from Athens and Thessaloniki. International practices, such as local management of housing stock in Portugal and collaborations with nonprofit associations in Germany, Denmark and Ireland, offer models for expanding affordable and energy efficient housing.
Digital Tools and Simplified Planning
Further digitalization should streamline licensing and urban planning without compromising environmental protections. The study also outlines specific recommendations to ease the crisis.
Proposed Measures to Address the Crisis
Evaluate flexible rent control measures to prevent abrupt price swings in problem areas.
Rebalance resources toward renters, who face greater financial strain.
Offer tax incentives for landlords renting below market rates and expand rental subsidy programs.
Create a rental insurance fund similar to models in Canada, financed by rental income taxes, to cover unpaid rents and legal costs.
Revise rental subsidy rules to align benefits with the share of income spent on housing, considering undeclared income thresholds.
Digitize the national housing and property map to clarify market supply and shortages.
Activate vacant homes through renovation subsidies such as the Renovate Rent program, tied to maximum rent limits and minimum lease durations.
Provide tax benefits for affordable housing investments following France and Spain.
Adopt region specific rules for short term rentals, including limits on rental days, geographic restrictions and higher fees in saturated zones.
Limit Golden Visa eligibility to new constructions or renovated uninhabitable properties, or direct capital to productive sectors and social housing.
Increase infrastructure and rental subsidies to support student and youth housing beyond the existing 8500 new beds under PPPs.
Research Team Behind the Study
The study was coordinated by Nikos Vettas, General Director of IOBE and Professor of Economics at the Athens University of Economics and Business. Researchers involved include Antonis Mavropoulos, Konstantina Antonopoulou, Ilias Valentis from diaNEOsis, Giorgos Gatopoulos and Konstantinos Kontos from IOBE.
