“The demographic developments in all countries are one of the parameters that influence, among other things, the housing conditions of the younger generations and, on the other hand, can influence both the age at which these generations start a family and the final number of children they have. In our country, where in recent years 25-45-year-olds have been facing increasing housing difficulties, it could be assumed that demographic developments are to some extent responsible for these difficulties. This could happen if we had, in a very short period of time, an ‘explosion’ in the number of 25-45-year-olds, which would also lead to an ‘explosion’ in demand. In Greece, however, we had the opposite, a significant decrease of 850 thousand of this group between 2009 and 2024 (-25%). Therefore, in order to look for the causes of the acute housing problems of young people, it is necessary to look beyond demography.”

This is what is reported in the latest digital bulletin of the Institute for Demographic Research and Studies (IDEM) on “Demographic developments and the housing crisis in Greece”
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The author of this article, Prof. Vyron Kotsamanis, director of IDEM, after a brief presentation of the significant changes that occurred after 2010, their impact on younger generations, and ways of adapting these generations to the rising cost of housing, considers that the rapid growing discrepancy between the purchase or rental prices of first homes and the income of the majority of young people who do not live in owner-occupied or rented accommodation has implications not only for family formation but also for the number of children these generations will have.

In particular, the author of this article states that in the post-2010 period we have had successive crises that have had multiple impacts on younger generations, while housing credit has been significantly reduced (i.e. the number of mortgages, which is now less than a multiple of the 2000-09 average – just 13k. in 2023), and at the same time, housing investment has shrunk significantly (from 8-11 % of GDP in 2000-09 to less than 4 % after 2012 and only 1.6 % in 2023). In recent years in particular, he notes, we have had not only a rapid increase in the demand for housing by foreigners but also in timeshare rentals, resulting in the aging of the housing stock and the limited supply of new housing, much of which was – and continues to be – aimed at Greeks or foreigners with high incomes.

These developments, the director of the Institute for Demographic Research and Studies stresses, have also led to a 4.5-point decline in the national homeownership rate based on Eurostat data (from 74.0 in 2014 to 69.6 in 2023), a decline that seems to be greater in urban centers. More recently, however, they have also led to a rapid increase in both house acquisition prices (newly built or not) and rents. The growing discrepancy between the cost of renting and the income of that part of young people who do not live in owner-occupied or rented housing from previous generations has led to the emergence of the current housing crisis.

Those young people who did not emigrate and remained in the country, Mr. Kotsamanis notes, have partially adapted to this new situation. This adaptation led those who were able to live with their parents to do so, as a result, the proportion of 18-34-year-olds living in their parents’ homes has increased rapidly (an increase of 12 percentage points between 2010 and 2022), so that we now have one of the highest proportions of young people living with their parents in the European Union (almost 72% compared to 50% on average in the EU) and, at the same time, one of the highest ages at which they leave their parents’ home (>30.5 years). Another part of the younger generations, according to him, who did not have this possibility have adapted by renting a house, which now absorbs a significant, and growing, part of their income. However, in both cases, this adaptation will, if other negative parameters are taken into account, have a cumulative effect not only on family formation but also on the number of children that these generations will have on average.

To address the housing crisis, which is now emerging as a “mega-problem” for mainly younger couples, the director of the IDEM proposes the implementation of an expanded program of social housing provision and the creation of a body to carry out targeted public housing interventions. Such a program would, according to him, enable, as in other European countries, the generations of young people living mainly in large urban centers and with low – or even middle – incomes to meet their housing needs, with affordable rent that does not absorb a particularly high proportion of their limited incomes.

Speaking to the Athens-Macedonian News Agency, Mr. Kotsamanis said that, to address the housing problem, some other positive measures have been taken in recent years, apart from the rent subsidy for very low-income households, such as the “My House”, “Housing and Work”, “Coverage”, and “Renovate – Rent”.

However, according to him, these programs have very limited budgets and beneficiaries, and, given the current situation, will not solve the acute housing issue of the younger generations.

It considers that what is now needed is an extensive program of low-rent rental housing, such as that which has existed for decades in many European countries, which cannot be implemented by private initiative. Social housing should therefore be one of the priorities of the government, local authorities, social partners, and civil society. The rapid implementation of such an extensive program will, finally, “at the same time – among other things – mitigate the negative impact of the housing crisis on demography, as the recent Opinion on the Demographic Initiative of the Economic and Social Committee has rightly pointed out”.