G. Stournaras: expensive housing exacerbates the country’s demographic challenge

Speaking at the Conference of the Central Bank of Croatia in Dubrovnik, the Governor of the Bank of Greece, Giannis Stournaras, noted that the housing cost burden on Greek households is among the highest in the euro area.

He stressed that “housing insecurity is increasingly emerging as a factor influencing long-term demographic trends. Limited access to affordable housing delays the formation of new households, particularly among younger generations. Many young adults ultimately remain in their parents’ homes for longer than they would wish, while others postpone or reconsider the decision to start a family.”

He further argued that population decline and ageing reduce the size of the labour force, weigh on long-term growth potential, and increase pressure on public finances. In this sense, housing affordability is directly intertwined with demographic sustainability and economic resilience.

According to data held by the central bank, the real estate market is primarily financed through buyers’ savings and to a lesser extent through mortgage lending. “A significant share of transactions is financed through household savings rather than bank borrowing, which supports the view that housing demand is not particularly sensitive to interest rates, as many buyers use accumulated wealth to acquire property instead of resorting to bank credit,” he noted.

He added that housing demand remains strong. It is driven not only by domestic factors—such as the gradual increase in disposable income in recent years, improved economic expectations, and targeted government housing support measures—but also by foreign investment, increased tourist flows in urban centres, and the perception of real estate as a relatively safe asset.

Mr. Stournaras also referred to government initiatives aimed at alleviating the housing problem, such as subsidised mortgage schemes and the strengthening of social housing. However, he noted that these policies require time to take effect, and that pressures on housing affordability are likely to persist in the short term.