Demand from abroad, imbalances in financing with significantly fewer loans from banks, the existence of many empty houses, a change in the profile of many Greek households with more now single-person or single-parent households, construction and energy costs, taxation, and legislation are some of the key factors exacerbating the major problem of housing in Greece.

The current situation in the Greek housing market, the parameters that exacerbate the problem, and some international practices and policy proposals are analysed in the latest study on housing by diagneOsis, which was carried out in collaboration with the Economic and Economic Research Foundation (IOBE), with its Director General and Professor at the Athens University of Economics and Business, Nikos Vetta.

The situation today

Greek households now spend a very large part of their income on housing, and this is reflected in a number of indicators. Housing costs, as measured by Eurostat, include rents, mortgage payments, property taxes, and energy and other bills. Over the period 2010-2024, as a percentage of household income, housing costs consistently exceeded the European Union average: in 2024, Greek households allocated 35.5% of their disposable income to housing, with the European average at 19.2%. However, the direction of this trajectory also looks alarming: From 2019 to 2024, contrary to what happened in most European countries, housing affordability in Greece declined.

Another interesting indicator through which the problem can be seen is the overburdening rate of housing costs. This indicator records households that spend more than 40% of their disposable income on housing, i.e., housing is an unbearable financial burden for them. In Greece, these rates also remain higher than the European average over time. They peaked during the years of the economic crisis and were followed by a partial decline. In cities, about 1 in 3 households (29.1%) spend more than 40% of their income on housing. In rural areas, the corresponding figure is 27.7%.
In rural areas, the corresponding figure is 27.7%.

The difficulties of households can be seen in other, related indicators. In 2024, the proportion of people living in households with debts (rent, mortgages, utility bills, and shopping instalments) reached 42.8% in Greece, with the European average at 9.2%. In the same year, about 1 in 10 Greek households were in arrears on mortgage or rent payments. Finally, the quality of housing is an important issue: A key indicator is the percentage of the population living in overcrowded housing. This indicator captures instances where tenants exceed the available space, as defined by specific standards. Greece’s longitudinal performance here is also worse than the European average, but the situation for the poorest households (those with less than 60% of the median income) has improved markedly in recent years. Taken together, the above indicators paint a picture of the so-called “housing crisis”.

The housing crisis in Greece, although clear and identifiable, does not affect everyone equally. The degree of burden varies according to housing status, age, and household size. Renters face the most severe pressure, as they spend a much larger share of their income on housing (6 out of 10 renting households spend more than 40%)than owners, even compared to those who pay off a mortgage.

But the latter also seem to be in trouble. About half of households with a mortgage spend more than 40% of their disposable income on housing. Although homeowners with a mortgage are relatively few, about 7% of the total population, their burden is very significant.

It also appears that renters are more often living in a more limited space. A key indicator is the average number of rooms per person: In Greece, landlords have enjoyed better housing conditions over time, with at least 1.2 rooms per person per landlord. Renters are consistently at lower levels.
The number of renters is consistently lower.

Still, the problem disproportionately affects younger people, as they have lower incomes and limited property. Household size and composition also play an important role: One-person households are heavily burdened, while single-parent households are even worse off. Almost 2 out of 3 single-parent households spend more than 40% of their income on housing.

They are more vulnerable than single-parent households, while single-parent households are more vulnerable.

The parameters that exacerbate the problem

Among the parameters that exacerbate the problem, imbalances around financing strongly affect the housing picture in Greece, both from a demand and supply perspective. On the one hand, banks are now granting far fewer housing loans than in the pre-crisis period. In 2024, housing loan disbursements reached about €1.4 billion. In 2006, the corresponding amount was more than €15.5 billion. This large difference is related both to the effects of the Great Recession on household financial credit and to more stringent lending rules by the banks themselves. In any case, however, it limits the ability of households to buy a home.

The existence of many vacant houses also affects the overall picture, even if, as is reasonable, not all vacant houses can be included in the market. According to the 2021 census, the country has 2,277,615 vacant homes, a number that represents 35% of the total. These homes include holiday homes and secondary residences, and a large proportion of them are located in the countryside. There are comparatively far fewer in Attica, making up 24% of the total.

A less obvious factor, such as the changing profile of many Greek households, may be having a significant impact on housing costs. In recent years, household size seems to have been systematically declining, as indicated by crowding rates, which are improving, especially for the poorest. However, as single-person and small households increase, the demand for smaller dwellings with fewer square metres is increasing. The market cannot easily and quickly adapt to this new reality, so the pressures disproportionately affect smaller homes.

There are, however, some structural factorsthat play an important role in the affordability of housing in Greece. To some extent, the institutional framework shapes prices and restricts or enhances the supply of housing. For example, taxation and investment affect the cost of ownership and the value of property. The well-known Single Property Tax (ENFIA) has been a largely fair tax and a key source of revenue for the state for many years. Public investment in infrastructure – transport projects, such as the Athens Metro, and urban regeneration projects – improves accessibility and quality of life and ultimately attracts buyers and investors.

International practices and policy recommendations

The study also devotes an extensive chapter where it explores how other countries, mainly European, manage similar problems of access to affordable housing for different groups of their population. This documentation is useful both because it offers different perspectives on similar problems and, therefore, can generate useful insights, as the diaNEOSIS study points out.

On the other hand, it also shows the limits of this approach: many countries, especially in Central Europe, have a tradition of decades or even centuries of housing policy interventions, which are very difficult to adapt to local conditions. For example, in Austria, about 1 in 5 dwellings is available as rented social housing. In Greece, with a fragmented home ownership regime and a still strong culture of home ownership, one can hardly see similar models being implemented directly and quickly.

In France, social housing has a long history and represents approximately 14% of the housing stock, which is typically rented. But in addition to social housing, the French state offers rental subsidies, interest-free loans for first-time homebuyers, and tax incentives to landlords who rent at lower prices. Spain, Portugal, and Italy have historically limited social housing, as has Greece. However, they recently adopted more proactive policies: restrictions on rent increases, creation of new public housing agencies, utilization of vacant properties, and strengthening of subsidies.

Having developed the parameters of the problem in detail and drawing on international experience, the study concludes with useful policy directions, adapted to the Greek context. On the one hand, it supports the feasibility of a central state body responsible for implementing a National Strategy for Housing. This body, in addition to coordinating existing measures, would usefully have the capacity “to exploit public land, renovate and construct housing, and cooperate with local government, such as the pilot projects in the municipalities of Athens and Thessaloniki, and internationally.”

It also suggests possible reformsto curb excessive rent increases, but combined with increased protection of property from inconsistencies. In the same framework of guidelines, it is also proposed to better organise tenant support measures, such as related allowances and rent rebates. To make use of vacant housing, the study proposes improvements to existing schemes, such as “Renovate-Rent” “with a rental cap and minimum lease duration, and supplementary tax relief could be granted to landlords or developers who offer housing at a reduced rent. The research also identifies scope for expansion of the restrictions that apply to short-term rentals and the Golden Visa, depending also on the needs of each geographical area. It also recommends further provision for student housing.

Finally, some other useful policy directions, also mentioned, are incentives for decentralization, such as the strengthening of telecommuting, which can mitigate demand in Attica, the clear institutionalization of a framework for auctioned properties, reducing bureaucracy in transfers and other interventions to enhance liquidity in the real estate market, facilitating the resolution of non-performing mortgage loan portfolios securely and transparently, as well as wider investment in transport and transport infrastructure.