The housing market is in short supply, estimated by some real estate experts to be worth more than 100,000 homes, leaving supply unable to meet the demand for both buying and renting quality properties. At the same time, this shortage is also fueling a price rally, which in turn makes it harder for households to meet their housing needs. This reality is evident in the case of the My Home programme, which provides loans at low interest rates to 10,000 young people under the age of 39 to purchase property worth up to 200,000 euros, up to 150 sq.m. and not younger than 15 years old.

Based on relevant reports, although more than 1,500 loan applications have already been approved, almost 30,000 applications were submitted by interested parties within 45 days (from April 3 to May 15), as a result of which an extension of the program is already being considered. On the other hand, the supply of suitable housing is much lower. In a recent survey conducted by the Athens – Attica Realtors’ Association, out of 45,000 listings for homes posted by members of the association, only 10,674 were for properties eligible to participate in the program, indicating the difficulties encountered. those who are interested in finding a home to their liking.

At the same time, in general, the supply in the housing market is steadily declining. According to “Golden Opportunity”, which collects the largest volume of online real estate ads, in the center of Athens, the total supply in 2022 is the end of 2021. This 10% drop also demonstrates the weakness seen in the restocking of homes for sale.

According to Mr. Michalis Kaloyannakis, head of the real estate agency TOPOS IKE, “The main reasons why the supply of houses, especially second-hand ones, is limited is primarily due to the fact that many houses remain closed. Many of the properties are outdated and require major renovations to make them functional again and therefore bring them into a salable condition.”

According to him, another reason is multi-property, which is especially observed in apartments in the center of Athens.

Given the presence of many heirs, often disagreeing with each other, a significant amount of real estate remains off the market. The third and important reason, according to Mr. Kalogiannakis, is that many owners now prefer to rent out property rather than sell it. “Renting is especially profitable now due to rising rents, as a result of which many owners prefer this option to sale, which was not the case before,” emphasizes Mr. Kalogiannakis.

The total supply in 2022 has decreased by 7,727 houses compared to the end of 2021.

Based on data compiled by the Etheron Institute for Research and Social Change, “Greece has one of the highest housing vacancy rates in Europe with a large concentration in urban centers. In 2011, the percentage of vacant houses in the municipality of Athens was 31%, in the municipality of Piraeus 28% and in the municipality of Thessaloniki 28.2%. The number of vacant apartments in the Attica region increased by 77% in 2011 compared to 2001, while in the municipality of Athens alone the number of vacant apartments reached 132,000. available construction resources during the period of exacerbation of the housing problem,” it says.

Today, according to government data released by the Minister of State Aki Scherzo, 750,000 properties declared vacant/closed by AADE. According to Eteron’s analysis, the main reasons why this happens is because their owners, for example. they don’t want to be burdened by any problems related to rent (poor tenant management, defaulters, renovation needs, etc.) or are owned by multiple heirs. In addition, many of these properties cannot be rented out because they are in very poor condition and their owners are unable or unwilling to invest the necessary funds to maintain or renovate them.

At the same time, entry into the market of new buildings is noticeably limited, which was also not the case in the years preceding the financial crisis.

For example, for the decade 1998-2008. the number of new building permits (private construction) was 460,204, with a peak recorded in 2005, when 56,342 new properties “fell” onto the market.

On the contrary, in the decade 2012-2022, the number of new buildings did not exceed 71,539. For a number of years, the number of new buildings did not exceed 5,000 per year, and in the last two years there has been a significant improvement with the issuance of almost 10,000 new permits per year. Of course, however, these properties are not enough to meet the demand, while they are also available at prices in excess of 3,000 euros/sq.m. (often over 4,000 euros/sq.m), i.e. are prohibitive for the vast majority of potential buyers.

Another reason limiting the supply of housing is the volume of red loans, which mainly relate to real estate purchased in the period 1995-2010. Their number is estimated at 45,000 across the country, of which about 10,000 were purchased by banks and debt management companies. These properties tend to be slow to come to market, exacerbating the problem.

Use of free space

The development of a new housing policy appears to be one of the goals of the next government, especially if planning continues for an autonomous Ministry of Housing Policy. The focus will be on creating from scratch a housing policy model that is self-financing and sustainable, so that it does not depend on the allocation of development resources or on the financial space of each year. In addition, as Mr. Alexis Patelis, Head of the Prime Minister’s Economic Office, stated in a recent diaNEOSIS analysis, “Using vacant houses is key to addressing housing problems. But it’s also best practice, given the de facto limits that climate change will place on the total building stock. The containment of prices will also occur due to the activation of supplies,” concludes Mr. Patelis.