A recent study published in the latest issue of the Economic Bulletin of the Bank of Greece highlights the growing severity of housing affordability issues across the country.
Authored by Nikolaos Vettas, Georgios Gatopoulos, Alexandros Loukas, Antonis Mavropoulos, and Sotirios Saperas, the study draws upon the most recent Eurostat data for 2023 to reveal that Greece ranks lowest among EU member states in terms of housing affordability.
According to the findings, nearly one-third of households in urban areas spend more than 40% of their disposable income on housing-related expenses. These include rent, mortgage payments, utility bills, and local taxes. Amid rising property prices, surging energy costs, and elevated borrowing rates, housing expenditures have continued to escalate—rendering adequate housing increasingly inaccessible to many Greek households.
Public spending on housing as a share of GDP was among the lowest in the EU in 2022. This combination of low public investment and increasing private costs underscores the urgency of addressing housing affordability, given its profound social and economic consequences.
On the household level, the strain of high housing costs forces families to adjust their consumption patterns, particularly since housing demand tends to be inelastic. Simultaneously, the ability to save and accumulate wealth is curtailed, which in turn affects both investment in the real economy and the broader financial system.
The study also shows that the share of households spending 40% or more of their income on housing—a threshold commonly used to define housing overburden—is markedly higher in urban areas compared to semi-urban and rural regions. This discrepancy is largely attributable to differences in tenure status: renters are far more prevalent in urban settings than in less densely populated areas.
Regional Insights and Inequality
Across regions—and particularly within the country's two largest metropolitan areas—housing overburden rates exhibit greater variability than median housing expenditure levels. This suggests that access to affordable housing is not only a widespread problem but also a contributor to income inequality.
Regions such as the South Aegean, Epirus, Attica, Thessaloniki, and Central Macedonia report the highest shares of households lacking access to affordable housing. These patterns, when examined alongside developments in housing costs and income levels, point to rising energy prices and structural shifts in rental tenure as primary drivers of declining affordability. They also reflect increasing geographic heterogeneity in the housing market.
The study’s descriptive analysis further reveals that the issue of housing affordability:
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(a) is closely linked to tenure status, with approximately 60% of renters in both survey periods spending more than 40% of their disposable income on housing;
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(b) disproportionately affects younger households;
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(c) is significantly worsened when the head of the household is unemployed; and
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(d) is influenced by both the family structure and the size of the household.
