High rents and housing problems in Greece

2023-10-21 15:28:28, Kosova & Bota CNA

Three out of ten Greeks live in rent. (For comparison: in Germany it is more than half of the households.) According to Eurostat, monthly rent expenses in Greece are higher than in Italy, Spain and Germany - relative to salary.

"I was really depressed because I couldn't find an apartment," Elsa from Athens tells DW.

I've even considered putting my stuff in a warehouse so I can continue researching in peace. After eight months, the 48-year-old employee managed to find an apartment.

To reduce expenses, she and her 15-year-old son used to live with her parents. Her job at an accounting office means she can't pay the rent. So she got a part-time job. As she works in one of the expensive southern suburbs of Athens, she was looking for an apartment close to the office.

"The agents told me: For the money you have, you should go to another area. This is not the right area for you."

But she was lucky and finally found an apartment through an ad without the help of an agent. Now she pays 900 euros for 130 square meters - which is two-thirds of her salary.

Coexistence with others

Christos, 42, who works in the hotel industry, was also looking for an apartment to rent for 15 months.

"It was one of the worst times of my life. It affected my work. I was unfocused. I was worried about where I was going to live and how I was going to cope if I couldn't find anything affordable. The stress was endless."

High rents and housing problems in Greece

For months before and after work, he searched the Internet, read newspapers, went to real estate agents and walked the streets looking for apartments to rent. After 15 months, he saw an apartment that had just become available.

"I talked to the owner and got the apartment. That day I felt like I won the lottery."

Christos pays 380 euros rent for 50 square meters.

"If they charged me 450 euros, I wouldn't have any money left to pay electricity or other expenses," he says.

Christos currently shares the house with a relative. He sleeps in the living room, his relative who cannot find an apartment, in the bedroom. Until a few years ago, shared apartments were almost a foreign concept in Greece. But the cost of living has risen significantly and shared apartments are a solution.

Low income - high rent

According to EU data, the average worker in Greece spends 37 percent of his salary on rent. In big cities like Athens and Thessaloniki, this percentage is much higher - from 60 to 70 percent, explains to DW Angelos Skiadas, lawyer and president of the Panhellenic Tenant Protection Association. The specialist website Spitogatos reports that rents increased by 48.7 percent between 2015 and 2022. In the center of Athens, the average rental price in 2023 was 9.52 euros per square meter, while in the expensive southern suburbs even 11.30 euros per square meter.

According to 2023 figures from website Numbeo, which compares the cost of living in Europe, a one-bedroom apartment costs €2,228 in central London, €1,316 in Berlin, €1,291 in Paris, €1,003 in Rome and €500 euro in Athens. Cheap, you might think, but a lot for a Greek earning an average net salary of 900 euros.

Attractive real estate market for foreigners

The good weather and the still relatively low costs of buying and renting real estate have attracted many foreign investors and tourists in recent years. For Angelos Skiadas, it is evident that the growth of Airbnb apartments, the purchase of properties by foreigners and owners who want to compensate for the loss of income due to the great economic crisis of recent years, are responsible for the significant increase in rents. In addition, there are foreigners from outside the EU who buy high-quality real estate in Greece in order to obtain the so-called "Golden Visa", which guarantees them a residence permit in Greece and a Schengen visa. These regulations were introduced in 2013 and amended in 2022.

Stratos Paradias, lawyer and president of the Panhellenic Association of Real Estate Owners, disagrees. In an interview with DW, he explains that only a very small percentage of properties in certain areas of Athens are rented out to short-term renters and tourists via Airbnb. However, there are no exact figures. There are thousands of empty properties, but their owners are not putting them on the market because of expensive renovation costs and high taxes to be paid on rental income, he says. The tax rate is 15 percent for rental income up to 12,000 euros per year and 45 percent for income over 35,000 euros per year.

High vacancy rate

Athens changed its appearance mainly between 1960 and 1980. Thousands of beautiful neoclassical buildings were destroyed. After the Second World War and the civil war that lasted until 1949, there was great poverty in Greece. People were looking for work mainly in Athens and Thessaloniki. They needed a shelter, so the houses were built quickly and without any serious urban planning. Today these houses are outdated and dilapidated. Many owners are unable to renovate them due to the economic crisis. So they either rent them, sell them or leave them empty. Many foreigners, especially Chinese and Arabs from the Gulf states, buy apartments or even entire apartment blocks to obtain the Golden Visa. They are then passed on to companies that offer them as apartments for rent, usually at an inflated price.

Angelos Skiadas sees the solution to the huge housing problem facing Athens today in that rental contracts should be concluded for at least six years and not just three years, as is the current practice. In addition, the amount of rent should be limited, for example, to six percent of the objective value of the property. For Stratos Paradias, one solution would be to lower taxes on rental income so landlords can put thousands of vacant properties on the market.

Elsa and Christos have solved the housing problem for now. But for thousands of others, especially students and young workers, finding an apartment remains an ordeal and there is no political solution in sight./ DW