Soaring rents, tourism led to housing crunch in Greece

ATHENS

In the run-up to the European parliament elections in June, many Greeks are focussed on what for them is the big issue: finding a home.

Soaring rents, record-breaking numbers of tourists and a surge in foreign investment in property all mean that getting affordable housing here is an uphill task.

And thousands of people face the same challenge.

Kyriaki Tsouti and Dionyssis Giakoumelos are among those caught in the housing labyrinth.

Tsouti, 32, is unemployed. Her partner, Giakoumelos, also 32, clears 750 euros ($804) each month.

They want to start a family, but 60 percent of their income goes towards housing expenses.

And even in the semi-rural town of Koropi east of Athens, an 80-square-meter  flat costs more than 500 euros a month, Tsouti told AFP.

"It's a considerable increase for our tight budget," she said.

It is a problem for increasing numbers of people in this country of 10.4 million.

Incomes slashed during the 2009-2018 debt crisis, have still not recovered.

In terms of household income, Greece ranks in 21st place among the 27 EU member states even after an increase in the minimum wage to 830 euros, according to EU data agency Eurostat.

According to a Bank of Greece report in November, Greeks spent 34.2 percent of household income on housing in 2022 compared to an EU average of 19.9 percent.

Between 2009 and 2022 salaries fell by 32 percent, according to figures from the Organisation for Economic Co-operation and Development (OECD). Greece has the lowest wages among developed economies, says the OECD.

That, and the cuts to pensions during the debt crisis, dealt a major blow to the purchasing power of Greeks. It currently stands at just 67 percent of the European average.

Only Bulgaria does worse.

Policies adopted after the pandemic to promote tourism made matters worse by pushing property prices out of the reach of ordinary people, said Thomas Maloutas, a professor of social geography at Athens' Harokopio University.

In certain parts of Athens, entire buildings have been purchased by Chinese, Turkish, Russian or Middle Eastern investors.

This is thanks to a "golden visa" scheme also employed by fellow EU states Cyprus, Portugal and Spain.

Introduced during the Greek debt crisis to boost the economy, it grants foreign nationals a residence permit in return for investing several hundred thousand euros in real estate.

And as with other popular European travel destination, this has particularly hit the short-term rental sector, said Maloutas.

"The market is overvalued," Maloutas said.

"Over-tourism and the golden visa have attracted foreign investors and stimulated demand while Greek incomes are stagnating," he added.

"Owners prefer to rent or sell their apartments in Athens at a high price and settle in the outskirts."