A number of years ago, during Greece’s devastating debt crisis, it seemed like everyone was looking for work. Greek TV shows featuring satirical humour showed youths celebrating like crazy after being offered employment on the basis that they will work for free. Forever. Today, champagne bottles are popped when someone manages to rent a 70 square meter apartment with four walls.
Supply levels in homes for sale maybe higher than the number of apartments up for rent, but the shortage problems in each segment are equally severe.
Soaring demand has pushed up property prices some 70% in the last few years, with rent following suit, while income levels have barely budged.
Housing stock has reached very low levels, making the hunt for decent accommodation even more challenging.
In fact, fresh data shows that the level of homes in Greece available on a per capita basis is the lowest in Europe.
Deloitte’s Property Index report shows that the number of dwellings per 1,000 citizens in Greece amount to 285, while Bulgaria tops the list with 624 dwellings (per 1,000 citizens) followed by Portugal (585) and France (552).
Further confirming this negative trend, figures also show Greece to be one of the worst performers when it comes to housing density intensity and the number of initiated dwellings per 1,000 citizens. In Greece, the figure is at 2.78, versus 5.5 to 6.5 in countries such as Austria, Serbia and France.
To be fair, Greece is not the only country in Europe to see tight, or very tight supply. However, the problem is particularly acute in Greece.
In addition to the difficulties conditions also seen elsewhere (eg. rising interest rates, soaring cost of building materials), Greece’s construction sector has faced additional hurdles.
The country’s ten year economic crisis froze building activity for a long time while Greek banks have yet to resume their regular duties and pump credit into the crucial housing sector.
Meanwhile, demand keeps rising. Greece’s recovering economy is fuelling demand domestically and buying interest from foreign buyers keeps growing. And it’s no wonder when you look at how much it costs to purchase a new residential asset in Europe and elsewhere.
In Israel, where a large chunk of foreign home buyers in Greece come from, the average cost of a home is 5,701 euros per sq/m. In France it stands at 4,639 euros, in Germany 4,800 euros, and in the Netherlands 4,116 euros.
What is the average price of a new residence in Greece? 1,330 euros per sq/m, says Deloitte. In Athens it reaches 2,972 euros, in the northern city of Thessaloniki 1,959 euros and in Patras (in the Peloponnese) 1,056 euros.
With nothing set to change on the supply side, the data indicates that buying a house will continue to keep getting more expensive. If you can find one, that is.