How the rental market is shaped and how the housing stock can be increased

of Eleni Botas

The surge in rents has caused concern as the government prepares solutions to the problem that has brought many households to the brink of economic suffocation, combined with the wave of precision sweeping the market.

The first moves on this issue were announced last week by Prime Minister Kyriakos Mitsotakis. “We are working on a housing policy for young couples.

I believe that this will have a particularly important imprint because there is now a problem, while his reference to the recent meeting he had with the President of the Republic K. Sakellaropoulou was clear, emphasizing that “the priority of the government is the low-income pensioners and those who live in rent “.

According to market experts, the “drawing up” of housing policy in our country, especially after the energy “crisis” which is directly linked to housing costs, is imperative.

The Eurostat survey for the year 2019, ranks Greece champion – 1st with a difference between European countries where tenants spend more than 50% of their income on housing costs (rent, utility bills, utilities).

Mentioning that, 62.1% of tenants in our country spent more than 50% of their income on housing costs. The corresponding percentage of tenants in Romania was 29.4%, in Spain 26.2%, in Bulgaria 24.2%, in Portugal 14.5%, in Germany 10%, in France 8.6% and in Cyprus only 4, 4%. Today in many cases tenants even spend an entire salary on housing.

A salary the cost of housing for a family

According to a Eurostat survey for the year 2019, it ranks Greece as the champion – 1st with a difference between European countries where tenants spend more than 50% of their income on housing costs (rent, utility bills, utilities).

Mentioning that, 62.1% of tenants in our country spent more than 50% of their income on housing costs.

The corresponding percentage of tenants in Romania was 29.4%, in Spain 26.2%, in Bulgaria 24.2%, in Portugal 14.5%, in Germany 10%, in France 8.6% and in Cyprus only 4, 4%. Today in many cases tenants even spend an entire salary on housing.

As reported in its analysis by E-Real Estates Panhellenic Network of Real Estate Agents “we understand that 62.1% recorded in our country can only be described as” outrageous “and at the same time unsustainable for any employee, as in many cases tenants even spend an entire salary for housing if it is a family home 85sqm-110sqm.

In fact, in the center of Athens, where the largest increases are recorded, rental prices have increased by 20% -30% on average over the last three years, while in areas outside the center the corresponding increase is estimated to have been around 10%. – 15%.

It is worth mentioning that now the cost of housing has skyrocketed to very high levels and due to the energy crisis, there are cases of tenants whose utilities for the month of December 2021 reached even 210 € with shared heating for 85sqm house.

Dld, about 25% of the rent for rents of € 800 / month and / or 40% of the rent if it is a rent of € 500 / month – mainly leases before 2017 “.

The 30-year-olds live in the children’s room

According to ELSTAT data in 2019, Greece has one of the highest percentages of young people aged 18-34 who live with their parents. In fact, this percentage remains high especially at the ages 25-34, reaching 67.2% (61.2% for women and 73.2% for men).

Also, according to Eurostat data, the percentage of home ownership of young people aged 25-34 in our country has shrunk from 25% in 2005 to 11% in 2018. In addition, according to a recent Prorata survey, 67% of young people aged 17 to 34- he estimates that he is not going to be able to buy his own house in his life.

Measures adopted and / or implemented by EU countries to rapidly increase housing costs

Cyprus:

-Housing Unit Creation Program by KOAG (Cyprus Land Development Organization).

-Introduction of Urban Incentives and Tools for the production of affordable housing and the creation of an affordable rental market.

– Cooperation with Local Authorities

Spain:

-In 2019 imposed the tenant’s stay until the end of the contract even if the property has been sold.

-The minimum term of the lease increased from 3 to 5 years.

-Rent support measures of 250 euros / month for 2 years, for young people under 30 if they earn less than 1,977 euros / month.

– Bill of € 2 billion that includes tax deductions for landlords who reduce their rents.

Germany:

-In April 2021, the German Supreme Court ruled that the ceiling imposed by the local government on rental prices in 2020 was unconstitutional and invalid.

-The local government of Berlin, decided to buy about 14,750 apartments for 2.46 billion € to solve the issue of high real estate prices.

Portugal:

-In 2018 it approved a law on housing in which, people over 65, or people with 60% disability, can not be evicted from their home, if they live more than 15 years.

– Prohibited contracts lasting less than 12 months with the right of automatic renewal for three years if the tenant so wishes.

-Promote tax measures for long-term leases with progressive tax exemption for income received from the landlord.

Vienna:

-Today, out of the 1.8 million inhabitants of the city, 62% live in social housing, according to the Municipal Council.

-He plans to build an additional 4,000 municipal apartments. About 500,000 people live in them with a net price of € 5.58 per sq.m.

– In addition, there are 200,000 subsidized cooperative residences or residences with subsidized rent and belong to the federation of limited income residences and cost on average € 512.40 per month.

-In Vienna for a subsidized residence the annual income limit is € 42,000 per person

Netherlands:

– The Dutch government, in order to avoid the imposition of rent control measures, has set a goal to build 1 million apartments by 2030.

What is happening in Greece

According to the study of E-Real Estates, the lack of housing policy in Greece dates back to 2012 after the abolition of the Workers ‘Housing Organization (OEK) and the Workers’ Home (OEE) due to a memorandum obligation.

-The measures studied by the Government according to information on the completed “affordable” housing plan.

1. Concession of 10,000 houses owned by the State

2. Granting interest-free loans for the purchase of a first home

3. Granting interest-free loans for the repair of a first home.

4. Construction of new homes and their availability with specific criteria and low costs for young people. (PPP)

5. Purchase of unoccupied houses through the OAED reserve but also European funds and their subsequent distribution to low-paid and young people.

-The measures that the state can institute immediately to deal with the rapid increase in housing costs, some of which have a predetermined duration until the start of the completed “affordable” housing project.

1) Establishment of an Affordable Housing Organization

2) Tax incentives

-Tax measures for long-term leases over 5 years with progressive tax exemption for income received by the landlord,

-Tax measures for property owners who will renew within 2022-2023 the lease agreement with the same landlord with the adjustment of the rent per year to be regulated based on inflation.

– Tax deductions for landlords who reduce their rents, a measure already being considered by Spain.

2) Properties of Unknown Owner / Local Government / Public

The undeclared properties – of unknown owner that will arise, as provided in article 9 of Law 2664/1998 for the National Land Registry that will come to the Greek State.

3) Guarantee of the same participation in the purchase of a house for young couples

-Financial support for the amount of the same participation in the purchase of a house requested by the Banking Institutions for the granting of mortgage loans, or to guarantee the above amount.

-The same participation for young couples should not exceed 10% of the value of the property and the remaining amount, provided that the banking criteria are met to be granted through a loan.

4) Immediate implementation of the measure of 10,000 houses by the State to young couples