The Housing Problem in The European Union and Greece: Key Dimensions and Policy Responses
Introduction
The housing problem has emerged as one of the most pressing social and political challenges in Europe, with rising prices and rents outpacing income growth amid deepening wealth inequalities. According to the September 2025 ELIAMEP policy brief by Thomas Maloutas and Dimitra Siatitsa, this crisis is not cyclical but structural rooted in construction costs, borrowing expenses, the treatment of housing as an investment asset, and the proliferation of short-term tourist rentals.
Between 2015 and 2023, house prices across Europe increased by more than 20%, while rental prices surged by an average of 48%. Housing affordability—measured by Eurostat as the share of households spending over 40% of disposable income on housing—has become the central indicator of the crisis. In 2023, 10.6% of urban EU households exceeded this threshold. In Greece, the figure reached a staggering 31%.Root Causes of the European Housing Problem
The document identifies three primary drivers transforming housing into an investment product, particularly in Southern Europe:
- Foreign capital attraction through Golden Visa programmes and preferential tax regimes for wealthy non-residents.
- Private debt management, where non-performing loans have concentrated housing stock in the hands of banks, REOCOs, and international funds.
- Short-term rental expansion, now an institutionalized business activity that removes properties from the long-term rental market.
The authors argue that decades of neoliberal housing policies—privatization of public stock, reduced public funding, and financialization—have drastically limited governments' capacity to respond effectively.
The Housing Problem in Greece: From Protectionism to Free Market
Historical Context: Self-Building and Antiparochi
Greece's housing problem cannot be understood without examining its unique post-war trajectory. Unlike Western and Northern Europe, Greece never developed a welfare-state model of public social housing. Instead, access to housing was facilitated through two informal systems: self-building (state-supported acquisition of plots and materials) and antiparochi (a land-for-flats exchange system). These mechanisms produced high homeownership rates but framed housing as a private family matter rather than a social right.
Critically, the OECD data confirms that the social rental housing sector in Greece is effectively non-existent—0% compared to an OECD average of 7.8%, with the Netherlands at 34% and Austria at 23.6%.
The Current Crisis in Numbers
The Greek housing problem intensified dramatically after the sovereign debt crisis, though its consequences were not immediate. Key statistics from the document include:
- House prices rose 13.9% in 2023 and 8.7% in 2024, while household disposable income grew only 8.1% and 5.6% respectively.
- The home-ownership rate declined from 78.0% (2010) to 72.2% (2024).
- Among low-income households, the housing cost overburden rate reached 90% in 2024.
- Non-performing mortgages stood at 6.3% as of June 2025.
- Short-term rental properties reached 232,841 units (over 1 million beds) by August 2024.
- Golden Visa permits totalled 17,791 as of January 2025.
The tourism boom, foreign real estate investment, and platform-based short-term rentals have further deepened the housing problem, particularly in Athens, where semi-basement apartments once functioning as de facto social housing are being converted into tourist accommodation, displacing the most vulnerable residents.
Policy Responses: EU Initiatives and National Action
EU-Level Interventions
The document highlights a significant shift: housing was historically a secondary EU competence but has now moved to the center of European policy. Key developments include:
- The European Affordable Housing Plan, supported by a dedicated Housing Task Force and Advisory Board.
- The New European Bauhaus (NEB), built on three principles—Sustainability, Beauty/Quality of Experience, and Inclusiveness—with affordable housing falling under the Inclusiveness pillar.
- The 2024 EU Regulation on short-term rental data collection (Regulation 2024/1028).
- Doubling of Cohesion Policy investments in affordable housing through the ERDF.
Greece's Policy Mix: Gaps and Criticisms
The authors are sharply critical of Greece's current approach. Housing policy remains subsidy-based, fragmented, and demand-oriented. The data reveals a stark imbalance:
Programmes such as "My Home" (subsidized loans for young buyers), "I Save Energy," and "Social Antiparochi" (a PPP mechanism on public land) dominate spending. The authors warn that Social Antiparochi, as amended in 2025, will lead to complete privatization of new housing units within a decade, as up to 70% transfers to developers and the remaining 30% can be purchased by beneficiaries.
No expenditure is directed toward creating a permanently affordable social housing stock under public control—a gap the document identifies as the most critical failure.
Strategic Recommendations
The brief calls for a dual approach combining short-term market regulation with long-term structural reform:
- Immediate measures: Rent and price oversight, protection of primary residences, restrictions on tourist conversions, limits on speculative investment.
- Medium/long-term measures: Creation of low-rent social housing managed by municipal or non-profit agencies; re-use of vacant buildings; fair distribution of energy renovation costs; socially just property taxation.
- Institutional reform: Re-establishment of public housing bodies (abolished in 2012 with DEPOS and OEK) capable of long-term strategic planning.
The authors emphasize that cash subsidies alone are neutralized by the market as increased demand, pushing prices higher. In-kind solutions—actual housing stock—are far more effective but require institutional capacity, land control, and time.
Conclusion
This ELIAMEP policy brief offers a rigorous, evidence-based examination of the housing problem as it manifests across Europe and specifically in Greece. Its value lies not only in diagnosing structural causes—financialization, tourism-driven displacement, and the absence of social housing traditions—but in mapping concrete policy pathways that combine market regulation with beyond-the-market interventions.
As the European Affordable Housing Plan takes shape and new funding instruments become available, the document serves as an essential reference for policymakers, researchers, and housing professionals seeking to reframe housing as a universal social right rather than a speculative commodity. The housing problem, as this brief makes clear, demands not incremental adjustments but a fundamental reorientation of priorities.