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Learn moreContext and Background
This policy study, published by the Foundation for European Progressive Studies (FEPS) in collaboration with Eteron, Friedrich-Ebert-Stiftung, and InSocial, addresses the growing financialization of housing in Greece and Southern Europe. The research, conducted by Dimitra Siatitsa, Laura Colini, and Simone Tulumello, emerges in the context of a severe housing crisis, particularly in Greece, where housing prices have escalated dramatically since 2017, with a notable 66.4% increase from 2017 to 2024. This rising cost has led to increasing unaffordability for local populations, despite being more accessible to foreign investors.
Housing Unaffordability in Greece
Greece exhibits some of the highest rates of housing cost overburden in Europe, with 28.5% of the total population and 84.5% of the impoverished population spending over 40% of their disposable income on housing costs in 2022. Homeownership has declined from 73% in 2011 to 70% in 2022, while the rental market has expanded. The Greek housing market is increasingly influenced by foreign demand and tourism, with approximately 25% of residential real estate transactions funded by Foreign Direct Investment between 2018 and 2022.
Three Main Pathways of Housing Financialization
The study outlines three pathways through which housing is being financialized:
- Private Debt Management: Non-performing loans are now seen as investment opportunities, leading to a concentration of residential properties in the hands of banks and debt servicers. 2. Touristification of Residential Stock: The rise of short-term rentals has commodified housing for tourists. As of 2024, Greece had up to 232,841 short-term rental units, with 13,274 listings in Athens alone. 3. Activation of Entrepreneurial Activity in the Rental Market: New corporate entities are focusing on niche markets, like student housing and serviced apartments, prioritizing higher-income segments over local housing needs.
Legal Mechanisms Enabling Speculation
Several legal frameworks facilitate housing speculation, including:
- Golden Visa Program: Launched in 2013, this program offers residency to non-EU investors purchasing property above €250,000, contributing €5.5-7 billion to the market and increasing housing prices. - Non-Performing Loans (NPL) Management: Legal systems allow banks to transfer NPLs to specialized servicers, with mortgage loans managed by servicers reaching a nominal value of €69.4 billion by 2023. - Real Estate Investment Trusts (REITs): Although primarily focused on non-residential assets, there is pressure to expand into residential properties, which could further financialize the housing sector.
Policy Responses and Their Limitations
The Greek government's housing policies have faced criticism for primarily promoting mortgaged homeownership through subsidies, relying on market solutions without addressing social housing needs. Critics argue that these approaches may worsen the housing crisis by escalating prices and increasing social inequality.
🇺 Comparison with Other Southern European Countries
While housing challenges are prevalent throughout Southern Europe, Greece uniquely lacks any public or nonprofit housing sector, contrasting with Portugal, Italy, and Spain, which have developed limited social housing mechanisms.
Alternative Policy Paths
The study proposes three pathways for reorienting housing towards social values:
- Controlling market dynamics: This includes regulating rents and curbing speculative investments. 2. Socializing housing: Expanding public housing stocks and reducing reliance on private market solutions. 3. Building democratic governance: Establishing governance structures that align national and local housing policies with principles of equity and inclusion.
Conclusion
The study concludes that mainstream policy solutions, such as market reliance and public-private partnerships, are part of the problem. It advocates for housing policy anchored in social rights and sustainability, channeling investments toward equitable housing systems.