Greece records one of the highest housing cost burdens in the European Union, as an increasingly larger portion of household income is spent on housing expenses. According to a study by the Bank of Greece, the ratio of total housing cost to net disposable income for tenants in free market rentals reached 37.5% in 2023, compared to the EU average of 26.4%. For lower-income groups, this burden exceeds 48%.

At the same time, the price-to-income ratio, which measures the relationship between housing purchase costs and annual incomes, is on the rise. In 2023, the ratio stood at 7.8, up from 6.4 in 2017, reflecting a significant decline in housing affordability, particularly for first-time homebuyers. The continued increase of this index indicates that, relative to disposable income, access to homeownership is becoming increasingly difficult.

The burden is especially heavy for vulnerable groups. Around 30% of households in the lowest income bracket now spend almost half of their financial capacity on housing needs. This phenomenon primarily affects renters, even though homeownership remains relatively high in Greece, albeit on a steady decline, particularly in major urban centers.

The situation is further aggravated by rising rental prices, which have shown upward trends across all housing types from 2018 to 2023. Housing costs are increasing both for renters and for those repaying mortgages. For the latter, the expense-to-income ratio approaches 32%, mainly due to rising interest rates over the past two years.

Meanwhile, public spending in Greece for housing support remains among the lowest in Europe, just 0.1% of GDP in 2022, worsening the position of households.

The high housing burden has direct social and economic consequences. Households are forced to cut back significantly on other consumption, since housing is an inelastic need. Simultaneously, high housing expenses limit saving potential, which impacts investment and overall economic activity.

The Bank of Greece analysis also shows that Greece lags significantly behind other EU countries in terms of what is considered “affordable” housing. While in countries like Germany, France, and the Netherlands, the burden for renters ranges between 20% and 28%, in Greece it has consistently exceeded 35% since 2018. The price-to-income ratio in Greece remains one of the highest in the EU, with its deterioration accelerating over the past five years, without corresponding increases in household real incomes.

The study concludes that Greece’s housing burden has taken on structural characteristics, as rising housing costs coincide with stagnant or slowing incomes. This trend significantly limits access to decent housing, making the need for targeted support policies more urgent than ever.