1. Rents

A. Sky-high rents

The issue of rising rents, combined with the overall increase in housing costs and the cost of living, is now one of the biggest concerns for citizens, and especially for young people. 1

Access to rental housing is becoming increasingly difficult as rental prices are very high in relation to incomes and salaries, with a continuously increasing tendency in the past few years. Especially for people who are living on the minimum wage and low-income households, the rent to income ratio is prohibitive. 2

Also, the increasing difficulties in accessing home ownership and the limitation of families’ ability to support their younger members increase the importance of the rental sector for younger generations, immigrants and, more broadly, for those who do not own a house or have no possibility to use a family asset.

The excessive increase in rents is not just a Greek problem. Across Europe, there has been a significant increase in purchase and rental prices since 2010. The decrease in housing production during the recession, but also mainly the increase in speculative investments in real estate, housing financialisation and pressures from the touristic use of the housing stock are regarded as the main reasons.

The problem is particularly acute in the Municipality of Athens and the large urban centres, in areas with increased tourist traffic, but also in smaller cities with students or a population of seasonal and temporary workers who are forced to move for work reasons (e.g. substitute teachers, etc.).

Looking for a house to rent has become a nightmare, and often the available houses are in very poor condition, without heating, with humidity, and other problems that make them almost uninhabitable.

B. 79.2% of the people are overburdened by housing costs

In Greece, 20% of the households live in rental housing (EUSILC 2019), a rate that’s only slightly lower than the European average of 22.2%.3

There are significantly more people living on the rent in urban centres. More specifically, in the Municipality of Athens, according to the latest census data (Hellenic Statistical Authority ELSTAT 2011), 38% of households were renting, while in some areas the percentage reaches even 50%. The situation is similar in the rest of the country’s large municipalities.

According to the census’ data (ELSTAT 2011), 63.16% of the tenants are between the ages of 15 and 44, while in the same age groups, the percentage of owner-occupation is only 23.10%.

According to the ELSTAT data on housing costs, renters are the group facing the most problems. 79.2% of renters are overburdened by housing costs, compared to 21.15% of homeowners. Therefore, housing costs are a major contributor to the rise of inequalities. 4

At the same time, tenants live in worse conditions. 35.3% of renters live in housing with limited available space (“housing overcrowding”), compared to 28.05% of homeowners. Renters are more likely to experience severe housing deprivation due to lack of basic amenities: 8.6% of households in rental housing, compared to 4.9% in owner-occupied housing without a mortgage and 6.2% in owner-occupied housing with a mortgage.

The rental sector is associated with high rates of insecurity, as it houses a large share of vulnerable and financially disadvantaged groups. The risk of poverty is higher in the rental sector. According to ELSTAT, 18.5% of households living in rented accommodation are at risk of poverty, compared to 17.4% in owner-occupied housing.

Up until recently, in the ELSTAT EU-SILC surveys, the percentage of poor households renting at market price was consistently higher than that of non-poor households. Specifically, in 2011, 20.8% of poor households were renting compared to 16.3% of non-poor households, and this increased to 25.1% for poor households and 18.4% for non-poor households, in 2015. This ratio tends to level off in recent years (in 2020, 19.6% of poor versus 20.1% of non-poor households lived in rented accommodation at market price), possibly reflecting either a greater difficulty in accessing rental housing for poor households or a shift in middle and upper-income households towards rental housing.5

A large proportion of rental housing is concentrated in areas with the oldest housing stock, with the most need for maintenance, energy and infrastructure renovation. A significant gap in monitoring the rental sector and understanding the difficulties that tenants are facing is the lack of data on households in crisis (those who are occasionally or consistently unable to make rent payments), as well as on eviction proceedings that are ongoing or have been finalised due to debts.6

According to the nationwide real estate network E-Real Estates’ analysis of the ELSTAT data regarding the changes in residential rental prices7, after a significant decrease in rental costs in 2012-2017 (by 25%), rents started to increase annually, starting from 2018 when they rose by 8.4%, then 10% in 2019, 5.8%-6.7% in 2020, while the forecast for 2021 is close to 7%.

According to data from real estate agencies and ads, in recent years there has been an increase of 30% to 50% in some areas of Athens (Graph 5a) as well as in a number of municipalities in the Attica region (Graph 5b). Similar increases have been recorded in Thessaloniki, and to a lesser extent in other urban centres. 8

In the Athens city centre, where we’ve seen the largest increases, rental prices have risen by 20%-30% on average over the last three years, while in areas further away from the centre, the corresponding increase is estimated to have been in the region of 10%-15%.

In another survey conducted by the same company, it was estimated that approximately ⅔ of the properties in the city centre of Athens are rented for more than 600 euros per month, while the majority of the more affordable properties were built before 1980.

C. Inability to access owner-occupied housing

The increase in rents is attributed to a number of factors, which have to do with both the current conjuncture (such as the touristification of the housing stock and the pandemic) as well as with long-term/structural factors (e.g. broader changes in the economy and the production model, significant changes in the ownership structure of residential property due to the increase in investment in the housing market).

When it comes to Greece, the main reasons for the spike in rental costs are:

• The increase of the demand for rental housing, since it is impossible to access owner-occupied housing because of the fact that disposable incomes are shrinking, households’ savings are limited, access to credit is difficult, and housing prices have risen significantly in recent years.
• The revitalisation of the construction sector and the real estate market after almost a decade of collapse and inactivity, which was followed by a drop in rental prices during the economic recession. While, more recently, the significant increase in construction costs has also affected the cost of housing.
• The limited supply of newly built houses, due to the inactivity described above. In the case of the city centre of Athens, in particular, the reduced supply of properties compared to the existing demand is due to the lack of investment in the maintenance and upgrading of the housing stock in previous years and the exploitation of residential properties for commercial or tourist use.
• The growth and expansion of the platform economy that facilitated the expansion of short-term rentals and the tourist and commercial use of the scattered and diversified housing stock.
• The shift of accumulated international and domestic capital towards the real estate market and the more intensive exploitation of the housing stock. This activity is reinforced by significant changes in the institutional framework for real estate management, investment attraction policies (Golden Visa etc.), the liberalisation of the secondary market for non-performing loans, the broader plans for the Athens metropolitan area, and the entry of new, larger-scale business and institutional players in the real estate market.

The increasing difficulties in accessing affordable housing are also directly related to the state’s long-standing failure to produce a stable policy for access to rental housing and tenant protection. Despite European recommendations for tenure neutrality, when it comes to protection and public expenditure, there is a clear priority towards supporting home ownership through direct and indirect benefits.

The supply and availability of rental housing is largely based on the investment strategies of small landlords and this specific sector remains poorly monitored, regulated or controlled. At the same time, policies for the supply of affordable rental housing (social, non-profit, cooperative) are completely absent.

D. Interventions for affordable rents

The increase in rents across Europe has fuelled the debate on the need for public intervention. Recently the European Parliament adopted a report on decent and affordable housing and is moving forward with a directive and measures. The issue was also addressed by the World Bank in a recent study.

European organisations for the right to housing propose the regulation of the private rental housing market (FEANTSA 2021) and the development of an “Ethical Rental Sector”(FEANTSA 2018), the need to regulate short-term rentals, but also to limit the commercial exploitation of the housing stock by big investors.

Thanks to this particular context, there has been a rekindling of the debate regarding the need to regulate rents (rent control, rent cap) through legislative interventions9. The rampant surge in costs has led to efforts for new institutional interventions, such as the restrictions imposed on rent increases in the 2020 Catalan regional law (a measure that was incorporated in the Spanish housing law in 2021) or the reintroduction of revaluation controls in Berlin. Both attempts were met with strong reactions, and unfortunately were both overturned by the constitutional courts of their respective countries, causing once again uncertainty for tenants and a new wave of revaluations.

Discussions on that direction haven’t developed to such an extent in Greece. Still, the housing crisis issue is becoming increasingly present in the public dialogue sphere as well as in the media.

Unlike other European countries, in Greece, there haven’t been any strong trade unions or tenants’ associations historically, and therefore there aren’t any strong movements or demands regarding this particular issue. The Panhellenic Renters’ Protection Association (PASYPE) has a limited intervention capacity, while in Athens the issue has recently been brought to the fore by citizens’ movements (e.g. Unreal estate).

The exacerbation of housing difficulties has also stirred up the political debate, with subsequent announcements concerning the government’s intention to adopt measures and proposals on behalf of the opposition. The proposals mainly concern the reactivation of schemes similar to those of the Greek Workers’ Housing Organisation (OEK), the development of a social rental housing sector and rent subsidies.

Proposals are also submitted by local authorities, and more specifically, there have been efforts made by the Municipality of Thessaloniki in order to create a housing agency that would operate along the lines of social rental companies.