PROPERTY

Rent gets even less affordable

Tenants being slammed by high property demand, inflation pressure and rising energy costs

Rent gets even less affordable

The high-inflation environment and soaring energy costs are adding a fresh layer of challenges to the problem of high rental rates in Greece and the difficulties households face in meeting their obligations.

These new factors are further shrinking the purchasing power of a broad range of tenants or potential tenants at a time when the effects of the health crisis, as well as the decade-long financial crisis before that, remain visible.

“Rents in many parts of Athens show hikes that exceed 50% compared to 2017 levels, while there are also significant increases, between 30% and 40%, recorded in other major cities such as Thessaloniki, Patra and Volos,” an analysis by Alkis Kafetzis, a member of the Institute for Research and Social Change (Eteron), has shown.

“When one factors in the rental hikes in 2020 and 2021, the rise in energy rates and the general increase of the consumer price index, it is easy to conclude it has become particularly difficult for households to secure and maintain an affordable residence,” the study adds.

Estate agents RE/MAX Hellas showed a 5% increase in rental rates across Greece between the fall of 2020 and the fall of 2021, but in the main cities the hikes have been much greater. In Athens’ northern suburbs rents went up 17% in just 12 months and in the city center they posted a growth rate of 11.6%. The southern suburbs saw a 14% hike and Piraeus posted a 12.7% annual expansion.

Data from the Spitogatos platform show rental hikes in Attica coming up to 32% compared to 2018 in some western suburbs.

Rates started rising due to structural changes since the outbreak of the financial crisis. Before 2010, demand for purchase market was above that for renting. Today the picture has been fully reversed, with 90%-95% of those seeking a new home looking only to rent.

At the same time, a share of properties previously leased through long-term contracts has been withdrawn from the market and been shifted to short-term rental platforms.