Some 60% of households that rent spend more than 40% of their disposable income on covering expenses related to housing. Although this percentage is slightly higher than in 2018 (59.2%), it is far higher compared to those owners who service a mortgage.
The financial burden for those who rent the house they live in is significantly higher than that for those who are owners and are required to service mortgage loans. This is leading to the increasing inability of renters to access housing. These are two of the conclusions of an analysis by the Bank of Greece on housing affordability, which is included in the latest issue of the BoG Economic Bulletin.
Based on the analysis, in 2021, 60% of households that rent spend more than 40% of their disposable income on covering expenses related to housing. Although this percentage is slightly higher than in 2018 (59.2%), it is far higher compared to those owners who service a mortgage. Among them, the percentage that is required to spend more than 40% to cover housing expenses is below 50% (49%), being slightly lower compared to 2018, thanks to the improvement recorded in the purchasing power of households from 2018 to 2021.
The best position is certainly for owners who do not have a mortgage to cover, as only 12.5% spend more than 40% of their disposable income on covering housing expenses (e.g. utilities, ENFIA etc).
Overall, in urban areas 31% of households spend more than 40% of their disposable income on expenses related to housing, while in rural areas this percentage drops to 25% of all households.
“These findings are also reinforced by the fact that government spending on housing in Greece is among the lowest in the European Union,” the researchers emphasize in their analysis. “Recent increases in household incomes have not translated into a corresponding rise in purchasing power due to high inflationary pressures, reinforcing discussions about regulatory interventions to support households.”
By far the greatest burden on households is among tenants on Crete and in Western Greece. In both regions, 85.3% of households that rent spend more than 40% of their disposable income on housing. Given the increase in rents that has occurred since 2021, in the major cities of Crete and in Patra it is very likely this percentage is even higher today, a sign of the economic pressure currently exerted.