The Greek Housing Paradox: Aging Homes, Empty Properties and Record-High Costs

Greece presents a striking contradiction. It ranks among the European countries with the highest homeownership rates and possesses a substantial housing stock, yet it is facing an acute housing affordability crisis. According to a new analytical report by Alpha Bank, total housing costs — including rent or mortgage payments, utilities and fixed expenses — absorb 35.5% of disposable household income, compared to a 19.2% EU average.

Between 2015 and 2024, property prices in Greece rose faster than disposable incomes, gradually turning affordable housing into a scarce commodity for thousands of households.

An Aging Housing Stock and Limited Renewal

The issue extends beyond rising prices. The report highlights the structural aging of Greece’s housing stock:

• 64% of homes were built between World War II and 1990.
• 6% date back to the pre-war period.
• Only 2.6% of the current stock has been constructed since the onset of the financial crisis.

During the decade-long recession, residential investment collapsed. Although a recovery has been underway since 2018, it started from an exceptionally low base. The average age of properties now exceeds 30 years, and a significant portion requires major renovation or energy upgrades.

At the same time, real estate remains the dominant form of non-financial wealth for Greek households, accounting for roughly two-thirds of total household wealth — more than double the share seen in countries such as the United States, Switzerland or Japan. Historically viewed as a safe hedge against inflation and currency instability, property ownership today also acts as a structural constraint on market flexibility.

794,000 Vacant Homes — The Burden of Inactivity

One of the report’s most striking findings concerns the high share of non-primary residences. Nearly 35% of total dwellings — the third highest rate in the EU — are not used as main residences:

• 22.5% are secondary or holiday homes.
• 12% are vacant.

In absolute terms, this translates into approximately 794,000 empty properties, with one-third located in the Attica region and nearly 10% in Thessaloniki.

Despite a reduction in vacant units compared to 2011, the number of properties available for sale has dropped by roughly one-third. Vacant homes available for rent declined by 10.4%, particularly in high-demand regions.

The report links these shifts to:

• The expansion of short-term rentals,
• Investors seeking higher yields in a low-interest-rate environment,
• Behavioral changes during the financial crisis.

Urban Concentration and Regional Imbalance

Housing pressures are further intensified by strong urban concentration:

• Over 70% of residents live in cities and suburban areas.
• 35% of the population and 36% of employment are concentrated in metropolitan Athens.
• Including Thessaloniki, the figures rise to 45% of population and employment and 54% of GDP.

This concentration of economic activity in the two major metropolitan areas significantly increases housing demand and price pressures, particularly affecting middle- and lower-income households.

Housing Policy: From Demand Support to Supply Reform

Alpha Bank argues that policy measures to date have primarily focused on supporting demand, through rent or mortgage subsidies. However, the crisis increasingly reflects a supply-side problem.

Key questions raised in the report include:

• Why does a significant portion of the housing stock remain off the market?
• What institutional or tax barriers discourage the utilization of vacant properties?
• How can energy upgrades and large-scale renovations be accelerated?

The study concludes that Greece’s housing crisis cannot be addressed through fragmented subsidy programs alone. It calls for:

• A comprehensive strategy to renovate and upgrade aging housing stock,
• Tax and urban planning incentives to mobilize vacant properties,
• A broader regional development strategy to ease pressure on Athens and Thessaloniki by promoting investment, infrastructure and quality jobs across the country.

Greece’s housing challenge is not merely a matter of high prices. It reflects decades of underinvestment, demographic concentration and structural distortions in property utilization.

Without coordinated action addressing quality, availability and geographic distribution of housing, the burden on household incomes is likely to persist — deepening what the report describes as the “Greek housing paradox.”

Source: pagenews.gr