BUSINESS

Household costs are too high

NIKOS ROUSSANOGLOU

TAGS: Economy

Greece remains the European country with the highest burden on households regarding home expenditure in proportional terms, with its rate at four times the European Union average.

According to the latest data released by Eurostat a few days ago, concerning 2018, 39.5% of the Greek population have to spend over 40% of their disposable income on costs related to the property they live in. This compares with an average rate of 9.6% among the 27 EU member-states.

The limit of 40% has been set as a reference rate, as above that it is estimated households are excessively burdened. Home-related costs include rent, property ownership taxes, utility bills, heating expenditure and maintenance or repairs.

Therefore four out of 10 Greeks have to pay excessive amounts of money in relation to their incomes to cover their most basic need – i.e. housing – as a result of the destructive policies of the last few years. This was consolidated throughout the decade-long financial crisis, as Greece has steadily remained at the top of that chart since 2010.

In 2016 the rate of households spending more than 40% of their disposable incomes to cover their home needs reached 40.5% against a European average of 11.1%. In 2015 the Greek rate had been at 40.9% against an EU average of 11.3%.

Back in 2010, at the start of the Greek debt crisis, the share of Greek households excessively burdened by home-related costs had stood at just 18.1%, compared to an average rate of 10.8% in the EU.

According to the Eurostat data analysis, the main reasons for this negative development are the rise in the cost of housing (e.g. taxes), but even more than that the decline in disposable incomes, either due to salary reductions or to soaring unemployment.

The problem lies in the fact that, since 2014, when the existing situation was consolidated, almost no improvement has been recorded. After all, the purchasing power of households has been largely unchanged in that period.

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