Rental rates in Athens rose to 30 % over the year and exceeded pre-crisis indicators
In several districts of Athens, rent has risen in price over the past year by 20-30 % and exceeded the figures recorded before the crisis, reports ekathimerini.com. A similar situation is observed in several other areas of Attica.
According to the real estate website Spitogatos, in various areas of Attica, rental rates have increased by up to 30 % in the past 12 months. In glika Nere, an Eastern suburb of Athens, you can rent an apartment for an average of 7 euros per sq. m. per month, while just a year ago prices were at the level of 5.35 euros per sq. m.
Rents rose by 27.3 % in Keratea in South-Eastern Attica and by 26.4 % in Neon Faliron in the suburb of Piraeus. In the Gazi and Kipseli districts of Athens, annual growth was 25.2 % and 24.3%, respectively.
Because of the sudden increase in rental rates, many renters are unable to find affordable housing on the market and are forced to rent small apartments or move to disadvantaged areas. The cost of renting an apartment in Athens reaches 600-800 euros, which is 60-70% of the monthly income of a city resident with an average salary of 1,000 euros, writes ekathimerini.com.
“Recently, we rented an apartment on the second floor with an area of 100 sq. m., built in 2008, for 700 euros per month. Before the crisis, such property would have been rented for 500-550 euros. Similarly, an apartment in Kolonaki with an area of 80 sq. m. is rented for 1,200 euros per month, before the crisis it would have cost 900-1, 000 euros, ” says Lefteris Potamianos, President Of the Association of real estate agents of Athens and Attica.
During the financial crisis, especially from 2011 to 2015, the cost of renting in Athens fell by an average of 40 %. This was followed by two years of stability, after which the market began to recover thanks to a gradual increase in demand and short-term rentals. The rise in rental rates in recent years in Attica is estimated at an average of 25 %, but the situation varies depending on the location.
The sudden increase in rental costs is due to several factors. Against the background of economic growth in the country, the expectations of the population are improving, which supports the seller’s market.
According to Potamianos, the demand for rent is now much higher than in the years before the crisis. At that time, people preferred to buy a house with a mortgage rather than rent a house. Today, the picture has changed: only a few can afford to buy a house and are forced to rent, the expert says.
The shortage of affordable housing in the rental market also occurred due to the fact that many apartments were withdrawn by banks for mortgage debts, he adds. These apartments are not yet available on the market. This is tens of thousands of homes waiting for auction. And many people who used to live in them are now renting properties, which also increases the already high demand.
According to him, another 15 – 20 thousand properties in Attica are leased for short-term rent, and 80-85% of them are located in the center of Athens.
Another factor is housing programs for migrants that are implemented by non-governmental organizations. The program is currently searching for 400 buildings around Athens to house migrants.
MEANWHILE, the pomida Federation of property owners said that construction activity has declined by 95 % over the past decade, which also exacerbates the supply backlog.
The lack of new properties may have been necessary for the market during the crisis, when empty apartments accounted for up to 20 %, but today the needs have changed, and this has led to a shortage.
In addition, in recent years, many properties in the country have been purchased by Chinese investors, who are now renting them out. Rates on this property have been raised to provide higher returns.