Rental prices skyrocketed

Rental prices have skyrocketed, in many cases 20-25% higher than the average mortgage payment.

For this reason, according to market experts, many, wanting to rent a house, are thinking about buying it.

According to the executives of Engel & Volkers, in the past two years real estate has been bought by those who have money, but they do not know how to use it. Therefore, they decided to continue buying real estate, which is a safe investment.

Many also believed that Airbnb would end, but it never did. After the recession that occurred last year, this year it is moving up, while all the thoughts that the owners had to “transfer” their property from short-term to long-term lease have been abandoned.

For this reason, rental prices have increased significantly by 12-15%, while in the center there are areas where rental prices have increased by as much as 20%.

The explosive growth in rents actually tends to “spawn” a new subset of buyers who would rather pay instead of rent … mortgage payments.

The increase in rents has led to the fact that today in Attica, renting a family-friendly apartment in the eastern, northern and southern suburbs costs between 650 and 850 euros, which is almost the same as the average monthly wage.

Significantly, according to a 2019 Eurostat survey, 62.1% of renters in Greece spent more than 50% of their disposable income on housing costs (rent, utility bills, etc.).

All of the above data, depending on the fact that the selling prices of real estate are understated in the amount of 25% to 35% compared to 2007, and also due to the fact that the rent, compared to the monthly payment on the mortgage, in many cases lags behind by 20-25%, these are the main factors that drive the real estate market to the market … from renting a house.

It should be noted that the asking rental prices from 2012 to 2017 recorded a decline, reaching 25.5%, while in 2018 they returned with an increase of 8.4%, and in 2019 the rental growth rate reached 10%.

In fact, in the center of Athens, which has recorded the largest growth, rental prices have increased by an average of 20-30% over the past two years, while in areas outside the center, the corresponding increase is estimated at about 10% – 15%.

In the third quarter, rental rates in the northern suburbs increased by 10.5% with an average monthly rent of about 950 euros for an apartment of 100 sqm, and in the first quarter of the year it did not exceed 880 euros, while in the second quarter of 2020 the average rent in the northern suburbs was 845 euros.

That is, prices increased by 100 euros during the pandemic. In the south, the average rental price is 10.2 euros / sq.m. grew by 2.1% on an annualized basis, and in the western suburbs to 6.95 euros / sq.m, from 6.63 euros / sq.m.

The largest annual growth was recorded in the suburbs of Piraeus – 14.7%. Now the average rent is approaching 6.9 euros / sq.m. from 6 euro / sq.m a year ago.

In contrast, the eastern suburbs have seen a significant increase in asking rent by 7.3% per year, with the average price now reaching 7 € / sqm. from 6.45 euro / sq.m a year ago.