Mortgages for just one in every five house purchases

• 12 March, 25

Only 20% of residential acquisitions are financed by the credit sector, partly due to uncertainty.

Only 20% of housing purchases in the Greek market, or one in five, are carried out with the help of the banking system, that is, through obtaining a mortgage loan.

Data presented by Theodoros Mitrakos, director-adviser and former deputy governor of the Bank of Greece, at the Prodexpo North real estate conference for the market in northern Greece on Wednesday, showed that from 80,000 home purchase loan contracts concluded annually before the financial crisis, the number now does not exceed 14,000 contracts on an annual basis.

“In 2023, the value of new housing loans amounted to 1.2 billion euros and in 2024 to €1.45 billion, mainly due to the My Home programs, given that the financing criteria remain strict. Therefore, there is a very large differentiation compared to the pre-crisis period. This is explained by the reluctance of today’s young people to commit for such a long period of time and is naturally linked to two critical parameters, the high precariousness of the labor market and the low disposable income of young couples,” said Mitrakos.

Meanwhile, supply continues to lag demand, both nationwide and in the city of Thessaloniki where, as in Athens, a large part of the purchases are made by foreign investors interested in short-term rentals or the Golden Visa program. Somehow, the growth rate of sales prices reached 15.6% at the beginning of 2023 and has since been trending downward, remaining high, as, according to the data provided by Mitrakos, in the first nine months of 2024 it stood at 9.2%. While prices have more than covered the losses of the economic crisis, other critical variables of the real estate market, such as investments in new homes and the purchasing power of households, continue to lag behind.

“Before the crisis, investments in homes reached 10.8% of GDP, compared to 2.3% today, which also explains the gap in supply compared to demand,” said Mitrakos. This also explains the difficulty of beneficiaries of youth support programs for purchasing real estate, such as My Home, in finding the right house.

Cre: ekathimerini