Housing Squeeze: when rent reaches 94% of salary

The housing issue in Greece has emerged in recent years as one of the most critical socio-economic challenges, as housing affordability is deteriorating at a rapid pace. Findings from recent analyses indicate that housing costs are rising much faster than incomes, placing significant pressure on Greek households, particularly in urban centers.

According to the policy brief by the Center for Liberal Studies (KEFiM) titled “Housing Prices and Rents in Greece and the European Union,” in 2025 the average rent for a two-bedroom apartment in Athens amounted to 93.6% of the average monthly salary—more than double the EU-27 average (45.6%). For a one-bedroom apartment, the corresponding figure stood at 70.2%. These data highlight the disproportionate burden on Greek households, given that rents have approached European levels while wages remain significantly lower.

At the same time, Greece recorded the second-highest annual increase in rents in the European Union in 2025, at +10.1%, second only to Croatia, while increases across the EU-27 were considerably more moderate (3.2% for rents and 5.5% for housing prices). This development forms part of a broader upward trend following 2022, after a period of sharp decline during the crisis years (2011–2018) and relative stagnation until 2021.

The rise in prices is not limited to rents. According to data from the Bank of Greece, the housing price index in Athens increased from 60.1 in 2018 to 117.5 in 2025, marking a 95.5% rise over seven years and surpassing 2007 levels by 13%. At the national level, cumulative housing price growth has exceeded 67% since 2018, confirming the strong recovery of the market after the prolonged recession of 2008–2017. However, unlike the pre-crisis period, the current increase is not accompanied by a corresponding rise in incomes, widening the gap between housing costs and purchasing power.

The causes of the crisis are multifaceted, stemming from both demand- and supply-side factors. On the one hand, increased demand is driven by the growth of tourism and short-term rentals, the inflow of foreign investment—particularly through programs such as the Golden Visa—as well as demographic shifts, including the rise in single-person households. On the other hand, supply remains constrained due to low construction activity following the crisis, high construction costs, and the existence of a significant number of vacant, outdated, or energy-inefficient properties.

In Attica in particular, where housing pressure is most intense, affordability has reached critical levels. While there are areas where homeownership remains relatively more accessible, such as the western suburbs, in others—particularly the southern suburbs—prices are prohibitive for a large share of the population. In central Athens, the situation is mixed, as more affordable properties are typically older and require substantial renovation.

The overall housing burden is also reflected in the fact that nearly one-third of Greek households spend more than 40% of their disposable income on housing—the highest proportion in the European Union. The burden is even greater for renters and more vulnerable households, who often face increased uncertainty regarding access to adequate housing.

Despite the implementation of policies such as rent and mortgage subsidies and support programs for first-time buyers, these measures often stimulate demand without adequately addressing the underlying issue of limited supply, ultimately contributing to further price increases. For this reason, experts emphasize the need for a comprehensive housing policy focused on increasing housing availability, through the utilization of vacant properties, the promotion of construction activity, and the simplification of administrative procedures.