With 500,000 properties standing empty, Greece’s housing crisis is worsening, with 60% of tenants spending more than 40% of their income on housing. Property prices are also rising faster than incomes.

Housing crisis worsens – while 500,000 properties stand empty

Why are thousands of properties in Greece unused? What are the reasons that prompt owners to keep around 500,000 homes off the market, thereby depriving the economy and society of valuable space? The causes are manifold, but the problem is clear.

Countries With Inactivity Taxes on Properties

Several countries have rolled out taxes or penalties for properties left unused for too long. They’re trying to shrink the number of empty homes that make housing shortages and rising rents even worse.

In parts of Europe—France, Spain, Portugal—local authorities slap taxes on vacant properties. These taxes nudge owners to rent out or sell rather than just let homes sit empty.

For example, some French cities charge a vacancy tax if homes stay empty for more than a year. They want owners to put those places back into the rental market or up for sale.

In Spain, municipalities can levy similar taxes and sometimes even take over properties left unused, turning them into social housing. That’s a pretty bold move, isn’t it?

Outside Europe, places like Canada and California have started imposing penalties or fees on vacant homes. The idea’s always the same—free up more housing for people who need it.

Other countries go easier, using incentives instead of penalties. Some lower taxes on rental income or offer renovation breaks to encourage owners to use their properties, but they steer clear of direct punishment for inactivity.

Impact on the Housing Crisis and Property Use

Empty homes—so-called vacant housing—really add fuel to the housing crisis. In lots of cities, too many properties just sit unused, shrinking supply and pushing rents higher.

In Greece, more than 500,000 homes are unoccupied, even though demand’s through the roof. It’s a situation that just piles on pressure for renters and buyers.

High property taxes and steep income tax rates on rentals often scare owners away from renting out their homes. Sometimes it’s actually easier, financially, to leave a property empty than to deal with all the taxes and paperwork.

So, these factors keep a lot of homes off the market. Some governments try cutting taxes on rental income or offer renovation discounts, hoping to tempt owners to rent or sell. But honestly, these moves haven’t made much of a dent in the big picture.

When governments tax vacant properties directly, owners face a choice: rent, sell, or risk losing the property to authorities. That’s a serious nudge to put idle homes back to use.

Municipalities sometimes turn confiscated buildings into social housing, which at least helps people in urgent need.

These approaches show just how differently countries tackle the problem of unused real estate.

Challenges Around Empty Properties

Thousands of unused homes come with their own headaches. High ownership costs—think taxes and maintenance—make a lot of owners hesitant to rent.

Some face legal or financial messes that stall any plans to use the property. Market conditions don’t help either; plenty of owners hold onto homes hoping prices will climb, even if it means leaving them empty.

This hoarding just keeps supply tight, even when demand is obvious. Governments have tried tax breaks on rental income and renovation subsidies, but these haven’t solved the problem of the roughly 500,000 unused homes out there.

Inactivity taxes often spark backlash from property owners or get tangled up in politics. Some folks worry that harsh penalties will scare off investors or punish owners in tricky situations.

Summary Table: Reasons for House Vacancy

It’s pretty clear: a mix of taxes, costs, legal headaches, and owner worries keeps way too many homes empty—right when people need them most.

Research on vacant housing and the worsening housing crisis offers detailed insights.

Over 60% of Renters Spend More Than 40% of Their Income on Housing

In Greece, renting is a heavy burden. Renters spend way more of their income on housing than homeowners do—yes, even those still paying off a mortgage.

Back in 2021, about 60% of renters put over 40% of their disposable income toward housing costs. That’s up a bit from 59.2% in 2018, and it’s still higher than what mortgage holders face.

For homeowners with a mortgage, around 49% spend more than 40% of their income on housing. This number has dropped a little since 2018, probably because of small gains in purchasing power.

Homeowners who’ve paid off their mortgage are in a much better spot. Only about 12.5% of these folks spend more than 40% of their income on things like utilities and property taxes.

They just don’t feel the same squeeze as renters or mortgage payers. The gap is even wider when you compare city and rural life.

In cities, 31% of households spend over 40% of their income on housing. In rural areas, it’s 25%.

Urban renting is especially pricey, shutting out lots of people from affordable homes. Low government spending on housing support just makes things worse.

Greece is near the bottom in the EU for state housing aid. Even though incomes have ticked up a bit, inflation has eaten away those gains, leaving people struggling to keep up with rent or bills.

It’s honestly tough to see how renters manage. The huge share of income going to housing keeps the pressure on and sparks calls for new rules to help households avoid being crushed by costs.

For anyone who wants to dig deeper, plenty of studies break down housing costs and affordability in Greece. The bottom line? This financial strain shapes life for millions and keeps economic stability on shaky ground.

Source: Hania News

Property Market: Housing Prices Rise Faster Than Incomes

The Greek housing market is heating up. Property prices are climbing way faster than most people’s incomes.

Since 2018, house prices have rebounded after years of decline between 2009 and 2017. By 2024, they’d jumped almost 9%—which, frankly, makes buying a home feel out of reach for a lot of folks.

Why is this happening? Several things are at play. The country’s economy keeps chugging along, and investments in housing have picked up.

Policies matter too. The government rolled out a “Golden Visa” programme back in 2013, hoping to lure foreign buyers.

It worked. Foreign demand surged, especially in big cities and on famous islands like Athens, Santorini, and Mykonos.

Foreign investment has become a major force behind housing market growth. In 2023, nearly 30% of net foreign direct investment landed in Greek real estate.

Other sectors, like manufacturing and finance, didn’t see nearly as much—just 14% and 9% respectively. All that outside money keeps pushing prices higher, way beyond what many locals can manage.

The gap between income growth and house price rises keeps stretching wider. By 2023, house prices had shot up about five percentage points more than the average income.

So, homes are just getting less affordable for most people.

The market feels the biggest squeeze in large cities and tourist hotspots. Demand just keeps outpacing supply.

Foreign buyers often pay extra for the best locations, which drives up prices everywhere. It’s tough for locals to compete.

Purchase incentives for non-EU investors, like the Golden Visa, have only sped up this whole process. Urban centres and prime islands show the sharpest price jumps.

Policy makers and analysts are worried about affordability. With foreign demand, rising construction costs, and not enough homes, price growth will probably keep outpacing incomes—at least for now.

Source: Hania News

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