Housing as investment in Greece and Southern Europe - Private profit versus social value

This policy study, published by the Foundation for European Progressive Studies, explores the dynamics of housing as an investment in Greece and Southern Europe, authored by Dimitra Siatitsa, Laura Colini, and Simone Tulumello. It critically examines the tension between private profit and social value in housing policy.

Housing markets in Greece and Southern Europe are experiencing a significant crisis, exacerbated by neoliberal policies that prioritize housing as a financial asset. The study highlights that housing prices in Greece have surged by 66.4% from 2017 to 2024, with rental prices increasing over 75% during the same period. Despite appearing affordable in absolute terms, many locals cannot access housing due to the mismatch between local income and housing costs.

The influx of foreign investments, particularly through programs like the Golden Visa, has intensified housing unaffordability. Approximately 25% of residential transactions from 2018 to 2022 were funded by Foreign Direct Investment (FDI), and the Golden Visa program alone has facilitated over 22,298 permits, significantly inflating property prices. The study argues that this has led to a housing market increasingly detached from the needs of local populations.

Greece lacks any form of public or social housing, with homeownership rates declining from 77.2% in 2010 to 69.6% in 2023. The rental sector, although expanding, remains largely unregulated, contributing to growing wealth polarization and housing inequalities. Without substantial public intervention, the reliance on market solutions continues to exacerbate the crisis.

The study calls for a shift away from market-led solutions towards frameworks that prioritize housing as a social right. Key recommendations include implementing rent controls, regulating short-term rentals, and promoting the socialization of housing. It emphasizes the need for public investment to create sustainable, affordable housing options that align with community needs rather than speculative interests.

The report underlines the crucial role of EU policies in shaping housing outcomes across member states. It advocates for a cohesive framework that supports affordable housing initiatives while regulating financial markets to prevent further commodification of housing. This involves re-evaluating existing policies and creating a robust public housing sector that can withstand market fluctuations.

As Southern Europe grapples with a housing crisis fueled by financialization and foreign investment, the need for sustainable, publicly-oriented housing policies has never been more pressing. The study provides a comprehensive analysis of the socio-economic implications of current housing trends and offers a roadmap for transitioning towards a more equitable housing system that serves all citizens.