Homeownership in Greece declined 11.3% in 2005-21

A new economic reality has emerged in the Greek housing market amid the prolonged financial crisis, with a notable portion of the nation’s residential inventory now under the ownership of institutional or foreign investors. This trend is underscored by statistical data, revealing an 11.3% decline in homeownership rates from 2005 to 2021.

According to figures from the Hellenic Statistical Authority (ELSTAT) and Eurostat, Greece’s homeownership rate in 2021 stood at 73.3%, slightly exceeding the European Union’s average of 70%. By comparison, in 2005, the country boasted a homeownership rate of 84.6%.

Furthermore, industry insiders note that in the major urban hubs of Athens and Thessaloniki, homeownership rates are even lower, hovering around 60-65%. This phenomenon contributes to a persistent demand for rental properties, driven by the economic constraints faced by most households, preventing them from entering the property market.

Harsh adjustment

“During the economic crisis, many property owners were compelled to sell their homes to settle debts and other obligations. Some of these individuals turned to renting, others returned to their family homes, and some, particularly younger individuals, emigrated. Furthermore, some relocated from urban centers like Athens to rural areas, driven either by economic necessity (e.g. to tourist destinations) or a return to their roots,” stated Lefteris Potamianos, president of the Athens-Attica Realtors Association.

The effort to manage debts, whether from housing loans or credit cards and consumer loans, is mirrored in the significant worsening of households’ economic conditions during the crisis years.

According to Eurostat figures, as early as 2010, at the crisis’ outset, 30.9% of Greeks lived in households unable to consistently meet their financial obligations, including housing loans, rent or utility bills (e.g. electricity, heating etc).

Essentially, nearly one in three Greeks faced the challenge of navigating a particularly tough financial situation due to persistent unpaid debts. In comparison, the EU-wide equivalent percentage in 2010 did not exceed 12.4%.

This situation dramatically deteriorated in 2015, peaking when almost half of Greeks, 49.3%, lived in households with outstanding debts, compared to just 11.8% in the EU. Concurrently, this period witnessed heightened activity in the real estate market, with numerous sales of homes or other properties (e.g. land, estates etc), a trend reflected in the decline of the homeownership rate from 77.2% in 2010 to 73.9% in 2016.

Industry insiders note that in the major urban hubs of Athens and Thessaloniki, the rates of people who live in their own home are even lower, around 60-65%

Nonetheless, the evidence of many accumulating debts, surpassing their financial means, was apparent as early as 2010. Over five years, from 2005 to 2010, the homeownership rate dropped from 84.6% to 77.2%, signaling a much more pronounced trend compared to the crisis period.

Based on data from the 2011 census, which recorded around 4 million housing units, it is evident that nearly 160,000 households relinquished their properties and shifted to rental arrangements or relocated abroad.

According to Potamianos, this transition represents “a significant transfer of assets from private individuals to the financial system due to nonperforming loans.” He estimates that approximately 300,000 homes are now either tied up in bureaucratic processes and auctions, controlled by institutional investors, banks or funds.

This concentration of properties into fewer hands contributes to the declining homeownership rate.

This shift in property ownership has also altered the fundamental nature of Greece’s housing market. Potamianos notes that “the cultural approach of many Greeks toward housing has changed significantly. Acquiring a home is no longer the sole option.”

Instead, many young individuals consciously opt for renting, having firsthand experience of the challenges faced by their parents with family properties. Additionally, the inability of numerous families to financially assist their children in purchasing homes, a common practice before the crisis, further explains the ongoing decline in homeownership.

According to ELSTAT figures, Greece has one of the highest proportions of young adults aged 18-34 living with their parents. In 2008, this percentage stood at 58.4%, increasing to 69.4% by 2019.

Similarly, the homeownership rate among young adults aged 25-34 dropped from nearly 25% in 2005 to just 11% in 2018 (Eurostat).

Cramped living conditions

The repercussions of the economic downturn on household living standards extend beyond homeownership. One such indicator is overcrowding, where many individuals reside in the same dwelling. Eurostat data reveals that in 2010, 25.5% of the Greek population experienced overcrowding, surpassing the EU average of 19.1%. By 2021, this figure had risen to 28.5% in Greece, while decreasing to 17.3% across the EU. According to Eurostat, this category encompasses individuals living in homes with less than one room per adult or couple, and one room per every two children under the age of 12.

Greece also ranks poorly (22nd overall in the EU) in terms of rooms per person, indicating the level of comfort each resident has in their home. In Greece, there is an average of 1.3 rooms per person in each household, compared to the EU average of 1.6. The countries with higher ratios include Malta (2.3 rooms per person), Ireland and Belgium (2.1 rooms per person); conversely, countries with lower ratios than Greece include Romania and Poland (1.1 rooms per person).

Addressing the issue of affordable housing remains a longstanding challenge in Greece. Based on 2021 data, 34.2% of disposable household income in the country is allocated to housing-related expenses, the highest among EU nations. However, state efforts are under way to mitigate this issue.

Denmark ranks second with 26.3% of disposable income allocated to housing, followed by the Netherlands at 23.9%. Overall, the EU average for housing-related expenditure was 18.9% in 2021.