The high inflation environment and the surge in energy costs give new dimensions to the issue of high rental prices and the difficulty of households to meet them. These two factors come to further shrink the purchasing power of the broad mass of tenants or prospective tenants, at a time when the effects of the health crisis, as well as the ten-year economic crisis that preceded, are still visible.
Increases over 50%
According to a relevant analysis by Alkis Kafetzis, a member of Eteron (Institute for Research and Social Change), “rents in many areas of Athens show increases of more than 50% compared to 2017 rents, while significant increases (30 % -40%) are recorded in other cities of Greece, such as Thessaloniki, Patras and Volos. “If we take into account the increases in rents in the period 2020-2021, energy prices and the general increase in inflation, we easily conclude that the difficulty of households to secure and maintain an affordable home has intensified.”
A similar picture is recorded by the latest annual survey of the RE / MAX Hellas real estate network, which was published last autumn. Based on this, although the increase in rents of the last 12 months (Autumn 2020 – Autumn 2021) was 5% nationwide, however in large urban centers the increases are much more intense. For example, in the northern suburbs the increase in rents in just 12 months is 17%, while in the center of Athens rents record an increase of 11.6%. Respectively, in the southern suburbs and the city of Piraeus the increases are 14% and 12.7% respectively. It should be noted that the data are based on real lease agreements, made through the office network of RE / MAX Hellas.
According to the real estate price index of the online advertising network Spitogatos, at the end of 2021 the average requested rent in Attica amounted to 8 euros / sq.m., Increased by 5.2% on an annual basis. On the other hand, in the center of Athens, a relative correction can be seen against the exaggerations of 2018 (at the height of the popularity of short-term leases), as the current average asking price of 8.8 euros / sq.m. is 11.3% lower than at the end of 2018.
Inaccessible options
It should be noted that even 8.8 euros / sq.m. is much higher in relation to the long-term rental prices of apartments in the center of Athens, which did not exceed 6.5-7.5 euros / sq.m. average. Rents over 9 euros / sq.m. were observed only in districts such as Kolonaki and Lycabettus before the financial crisis. Today is a common place ads for apartments aged 20-30 years and an area of ​​80-90 sq.m., in neighborhoods such as Agios Eleftherios and Kato Patisia, which claim amounts of 700-800 euros, ie almost 9-10 euros / sq.m. Respectively, during the last 12 months, significant increases were recorded in areas outside Athens.
For example, in Anavyssos there is an increase of rents by 38.3% to 8.3 euros / sq.m., Followed by an increase of 26% to 7.6 euros / sq.m. the neighboring area of ​​Palea Fokea. In essence, the “pockets” of affordable rent have begun to disappear, limiting the options of prospective tenants. If high inflation is taken into account in rent increases, it is obvious that the real cost to households is even higher. According to the latest Eurostat estimate, inflation in Greece will reach 5.5% in January this year, from -2.4% in January last year and 4.4% in December. According to Spitogatos, compared to 2018, rents increase by 32% in the western suburbs and by 24.2% in the northern suburbs.
The causes of the rally
Prices are moving upwards due to the structural change that has occurred in the housing market since the financial crisis. Prior to 2010, the demand for housing was higher than the corresponding demand for rent. Today, this picture has been completely reversed, with 90% -95% of those seeking housing moving solely for rent. At the same time, a percentage of real estate leased through long-term contracts was withdrawn from the market and transferred to digital short-term leasing platforms, worsening the situation regarding the supply of real estate, especially in some areas of the historic center of Athens, but also in the south. suburbs.
The traditional support from the family for buying a house is weakening
Income-disproportionate rental costs in Greece, especially in large urban centers, and the difficulty of obtaining a private home, have begun to exacerbate the housing problem in the country, at a time when there is virtually no affordable housing policy for households. Unless large-scale initiatives are taken in this direction, social and economic inequalities will intensify in the coming years, focusing on the housing problem.
A few months ago, Akis Skertsos, Minister of State, had stated from the podium of the real estate conference Prodexpo 2021, that “the plan to move the nine ministries in the area of ​​the former PYRKAL, leaves us a lot of room to think about how to use the buildings will be left empty in the center of Athens. “Some of them will be demolished in order to free up public space and some others will be converted into houses.” A total of 127 buildings are expected to be released, with a total area of ​​350,000 sq.m.
Social housing
According to Efthimios Bakogiannis, general secretary of Spatial Planning and Urban Environment, the goal is, for the most part, the buildings that will be emptied in the center of Athens to be converted into social housing. This will happen through PPP projects, which will obviously be announced when the relocation plan of the ministries, which has a five-year horizon, goes ahead. According to Mr. Bakoyannis, this move will have multiple benefits, as not only will it provide housing for lower-income people, but it will also improve traffic, as moving more people downtown will reduce travel needs. In addition, the properties that will be utilized are expected to be energy upgraded.
However, the housing problem has started to escalate and there is no time limit until the relocation plan of the ministries goes ahead, which will start to mature in at least 3-4 years from today. More immediate initiatives are needed, as the later they are taken, the smaller the benefit will be, as the intensity of the problem will have intensified in the meantime. After all, today there are already dozens, if not hundreds, of empty buildings that belong either to the central government or to EFKA or to other public bodies.
What is certain is that the ability of the Greek family to assist its younger members in acquiring a home has decreased significantly, after the mediation of the multi-year crisis. The property of the Greek family has shrunk, as many households were forced to sell part of it in previous years, in order to cover immediate financial needs and debts. At the same time, from 2008 to 2016 the disposable income of households in Greece shrank by 33%.
This means that their ability to provide financial assistance to young people today, so that they too can have their own home, has been limited.
Inheritances, donations
A study by D. Emmanuel in 2013 recorded that 37.8% of the owners acquired their home through inheritance or parental benefit, 30.3% through borrowing and 17.5% without borrowing. However, when other forms of family support are recorded, such as the financial contribution, the percentage of cases where the family contributed to the acquisition of a private home reaches 56.4% of the total.
Respectively, according to the interim monetary policy report of the Bank of Greece for 2021, the savings rate in the last three years has gained a positive sign, however – as noted – “inflation developments already have a serious impact on household disposable income, while causing uncertainty as to their temporary or permanent nature “. The above data support the prediction that the overall rate of home ownership in the country will decrease significantly in the coming years, given the pressures on household savings and rising house prices.
Over 40% of the salary is spent by households on rent, bills
Increases in recent years have significantly worsened the quality of life of many households, and have begun to pose a housing problem for many, especially young people. According to Eurostat data for 2019, 83.2% of Greek tenants stated that they pay more than 40% of their income in order to cover expenses related to their accommodation (rent, DEKO bills, utilities, etc.).
This is the highest percentage in the EU, as the corresponding average in the EU. does not exceed 25% of those who rent the property in which they live. This means that a very high percentage of Greek citizens who rent the property in which they live live in poverty (based on the relevant assumption of Eurostat). The problem is more acute in large urban centers, where it is estimated that the percentage of those who live in rent is close to 40% (compared to 26.5% of the national average).
One consequence of this situation is the return to the family home, postponing the typical housing process followed until today, from the parental home to rent and then to the acquisition of a house for self-residence, sometime after 30 years. “One strategy followed by many young people in recent years, adapting to the conditions of the economic crisis, was to return to the parental home.
According to ELSTAT data, Greece has one of the highest percentages of young people aged 18-34 living with their parents. In fact, this percentage remains high when we focus on the ages 25-34, while in other European countries it is significantly reduced, which marks a significant postponement of the smooth housing of young people in Greece.
This postponement has become even more intense from 2014 onwards, with the percentage for the ages 18-34 reaching 66.7% in 2017 and 69.4% in 2019, from 58.4% in 2008 “, Notes Mr. Kafetzis.
An equally important change is the self-employment rate of young people. In the case of Greece, the relative percentage in the 25-34 age group has shrunk from almost 25% in 2005 to 11% in 2018 (Eurostat).
This trend is almost horizontal across Europe, with the exception of a few countries, mainly in Eastern Europe. This delayed access to home ownership is linked to three parameters: a) the more difficult conditions in the labor market, b) the welfare policies that have effectively perforated the safety net, especially for young people who do not have a stable career path, and c) the rising house prices, due to the increasing treatment of housing and bank mortgages as an asset of a financial nature.
See all the news
kathimerini
Follow Skai.gr on Google News
and be the first to know all the news
