Greece’s Housing Dilemma: Buying vs. Renting in a Market at a Crossroads

11:44 19/5/2025 - Πηγή: Dikaiologitika

In Greece, the question of whether to buy or rent a home has become increasingly complex in recent years.

A steady rise in rental prices has made the decision far from straightforward, placing significant pressure on households—especially in urban centers. Meanwhile, the gradual decline in interest rates, particularly since the final quarter of 2024, is beginning to shift

attention toward homeownership, as more people consider mortgage financing as a viable alternative to paying rent.

This evolving landscape is creating a delicate balance. While rents continue to rise, the pace has started to moderate slightly compared to property sale prices, which are climbing more aggressively. This disparity is prompting more potential buyers to weigh the long-term benefits of owning a home, especially as the cost of financing becomes marginally more favorable. However, this dynamic has also driven up sale prices, particularly in high-demand areas like central Athens and Thessaloniki, as interest in programs like the government-backed “My Home” initiative has surged.

The impact is already visible in the numbers. According to IMS-FC, Greece’s largest credit brokerage firm, the average monthly mortgage installment in several key areas now exceeds the average rent. For instance, in the Athens neighborhood of Ampelokipoi, asking prices for properties have jumped more than 30% over the past six months—even for older homes built 35 to 45 years ago. A typical 80-square-meter apartment with a 20% down payment would require a mortgage of €176,000. Under a fixed 10-year interest rate of 3.92% with a 30-year loan term, monthly payments come out to around €832. In contrast, the average rent for a similar apartment in the same area is €785. Despite these high costs, IMS-FC facilitated nearly 1,000 new housing loan contracts in 2024 alone, worth a total of €155 million, capturing a market share of nearly 12%.

Looking ahead, this trend may start to change. Policy interventions are expected to ease some of the upward pressure on housing prices, particularly those caused by foreign investment. Greece has already moved to tighten rules on short-term rentals in central Athens and raised the minimum property investment threshold for its “Golden Visa” residency program. These changes aim to cool investor-driven demand and could lead to a broader market adjustment—especially in lower-demand areas where modest price corrections may occur.

Still, while prices are rising, a recent analysis by Eurobank suggests that buying a home in Greece remains more affordable than renting when compared with conditions 15 years ago, before the country’s debt crisis. At that time, rental prices were relatively higher, while today’s rent increases have not outpaced those of property sales to the same extent. However, affordability remains a major concern for many households. Despite low interest rates, the combination of soaring home prices and economic uncertainty continues to put homeownership out of reach for a significant portion of the population.

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