Buying one seems like an elusive dream since 2009 Home for young citizens. Real estate prices are even higher, loans are even more expensive and wages are even lower. In fact, the newspaper “Eleftheros Typos” states that in the popular name generations, “Gen Z” are today’s students born from 1997 to approximately 2012.
“Millennials” are citizens between the ages of 27 and 43 who were born between 1980 and 1996. And this is today’s “potential audience” for buying a first home. It is the latter who are currently facing a problem, while the former, according to experts’ estimates, are likely to encounter greater obstacles when the time comes to consider such a purchase.
However, thirty-year-olds who currently receive salaries of around 1,000 euros gross / 820 euros net cannot get a mortgage. The same applies to a couple earning two salaries, as the repayment of an average mortgage of €120,000 with a fixed interest rate is €700 (684.9 – 793.27). Rising property prices increase the average mortgage value every year. According to ELSTAT, the average monthly household expenditure exceeds 1,600 euros. Even if they have no other needs, even if they were all always healthy, it takes a lifetime of significant deprivation for this math to work out…
Earnings
To proceed with the purchase of a property, you must either have your own money or be forced to take out a loan. Most people will have to spend between 80,000 and 150,000 euros in this case. Income is the “key” to buying a home for the vast majority of young people, except for the “lucky” ones who already have money. Today, workers in Greece have significantly lower wages than in previous years. It also points out that a young person’s real income is rarely enough to cover the cost of an average mortgage payment.
According to data from the ERGANI information system of the Ministry of Labour the average gross salary in Greece is close to 1,184.35 euros, or about 940 euros in your pocket. Recent figures from the Analytical Periodic Declarations (APD) of companies in the EFKA show that 26% of private sector employees work in flexible forms of employment with an average monthly salary of €430 (gross) and the remaining 76% in full-time work with an average monthly salary of €1,251 again gross. This means that even with this measurement, the total average monthly salary in Greece is at 1038 euros gross and 846 euros net for 2023. Although the amount is 4% higher than in 2022, the 9.6% increase in inflation last year and 5.1% in 2021 far outpaced wage growth. As a result, the real wage of workers will decrease. In practical terms, this means that it is even more difficult for those at the top to get a mortgage and be able to pay it back. The dream of young people to own their own first home has become even more distant in recent years. Real estate prices have risen significantly and loan interest rates have risen.
In any case, it is worth noting that in 2009, when life was cheaper, interest rates and real estate more affordable, the average wage was 26% higher, at €1,543 gross.
ANDbox “tiles”.
Home prices are the highest in 30 years. 2023 is expected to close with another 7% increase in property prices, while market experts expect the same for next year. Property prices have returned to 2009 levels, but workers’ wages are much lower. It is no coincidence that most wealth transfers involve either parental contributions, foreign investments or cash-rich purchases. Many are looking for an older or smaller property as a first home, but their prices are not cheap for what they provide.
It should be noted that at the end of the third quarter, property prices in the suburbs of Piraeus (Korydallos, Moschato, Nikaia) recorded a significant increase of up to 23.3%. Now it is necessary to calculate a square meter from 1,714 euros from 1,391 euros, which was in 2022. Another alternative for a cheaper property was the western suburbs of Athens, but even here prices increased by 19.20% and reached 1,800 euros per square meter from 1,510 euros, which was in 2022
As for Attica and especially in the areas near Athens, it is pointed out that the average property prices are the lowest and there is the highest demand. For an apartment of 85 m2. which has the basic features that someone wants in a residence, in Peristeri you will need around 150,000 euros, while in the suburbs of Piraeus around 190,000 euros.
In Thessaloniki property prices are marginally lower but rising rapidly as there is demand but little new construction. There are cheaper options, 40 year old properties with almost zero energy shielding, in lower security areas and many other compromises that can be made, but fortunately for all involved, hardly anyone invests 20 years of loan repayments in a property that has no future.
Banks and borrowers
Banks have many mortgage products, but none of them are cheap in 2023. From July 2022, interest rates are rising. Whereas before you only paid the bank’s margin and the cost of the loan, now you also have the high Euribor, which adds almost 4% to your final interest rate.
For a loan of 120,000 euros with a fixed interest rate, the average repayment is 700 euros, with bank offers ranging from the cheapest 684.9 to the most expensive 793.27 euros. Banks do not lend more than 70-80% of the value of the property. This means that even if you want to get a loan, even if you foreclose, you should have 20-30% of its value in equity. The above amounts refer to a reasonable average loan for the purchase of a residence worth 150,000 euros.
But with property prices rising, the average loan repayment increases significantly when you want a property for €200,000 or €300,000. That is as much as an apartment in Marousi or Zografou. For example, for an apartment worth 200,000 euros, for which you borrow 160,000 euros, the average installment offered is almost 1,000 euros per month (913.2 – 1,057.7 euros). If you are thinking of buying a house worth 300,000 euros, with a loan of 240,000 euros, then you must have a solid monthly income.
The average installment is around €1,450 with prices ranging from €1,369.81 to €1,586.55. There are markets for bank loans, but getting a loan is not as easy as it was before the memos. In many cases, they need important guarantees that not everyone has. A worker who wants to buy his first home on credit, without additional collateral, will have a hard time. Only 30-year-olds have the income to cover such repayments.