Foundation for European Progressive Studies (FEPS)
2025
Dimitra Siatitsa, Laura Colini, Simone Tulumello and others
This policy study, published in 2025 by the Foundation for European Progressive Studies (FEPS), delves into the financialization of housing in Greece and Southern Europe. It highlights the shift from housing being viewed as a social good to its treatment as an investment asset, exacerbated by a severe housing crisis that has rendered homes increasingly unaffordable for local populations. The findings reveal that while housing prices have surged since 2017, foreign investors find the market appealing, leading to a disconnect between local needs and market dynamics. The research identifies three primary pathways of housing financialization: private debt management, the touristification of residential stock, and the activation of entrepreneurial activity in the rental market. These pathways have transformed housing into a commodity, prioritizing tourist accommodations over local residences and facilitating a market geared towards high-income brackets rather than addressing the pressing needs of the community. Legal mechanisms, such as the Golden Visa Program, further enable speculation, driving up prices without providing tangible benefits for local residents. The study critiques the Greek government's recent housing policy packages for being market-driven and insufficient in addressing social housing needs. It suggests that these approaches may worsen the crisis by escalating prices and intensifying social polarization. To combat this, the authors propose alternative policy paths focused on regulating market dynamics, socializing housing, and building democratic governance, emphasizing the need for a decisive shift towards prioritizing social values and public good in housing policy.
This policy study, published in 2025 by the Foundation for European Progressive Studies (FEPS) in partnership with Eteron, Friedrich-Ebert-Stiftung, and InSocial, examines how housing has become increasingly financialized and treated as an investment asset rather than a social good in Greece and Southern Europe. The research was conducted by Dimitra Siatitsa, Laura Colini, and Simone Tulumello.
Context and Background
The study emerges amid a severe housing crisis across Southern Europe, particularly in Greece, where housing prices have risen dramatically since 2017 (66.4% increase from 2017 to 2024), making housing increasingly unaffordable for local populations despite appearing relatively inexpensive to foreign investors. The research analyzes how neoliberal policies, austerity measures following the 2008 financial crisis, and the growing influence of financial actors have transformed housing systems.
Key Findings
Housing Unaffordability in Greece
- Greece records some of the highest rates in Europe for housing cost overburden, with 28.5% of the total population and 84.5% of the poor population spending over 40% of their disposable income on housing costs in 2022.
- Homeownership has decreased significantly from 73% in 2011 to 70% in 2022, while the rental sector has expanded.
- The Greek housing market is increasingly shaped by foreign demand and tourism rather than local needs, with about a quarter of residential real estate transactions between 2018 and 2022 funded by Foreign Direct Investment.
Three Main Pathways of Housing Financialization
- Private Debt Management: The management of non-performing loans has become an investment opportunity for financial actors. A complex corporate system backed by public resources extracts value from these loans and their collaterals. Many residential properties are now concentrated in the hands of banks and debt servicers.
- Touristification of Residential Stock: Short-term rentals, enabled by digital platforms, have transformed housing into a commodity for tourists rather than residents. In 2024, there were up to 232,841 short-term rental units available in Greece, with 13,274 listings in Athens alone as of October 2024.
- Activation of Entrepreneurial Activity in the Rental Market: New corporate actors are entering the rental market, focusing on "niche market segments" such as student housing and corporate serviced apartments, targeting higher-income brackets rather than addressing local housing needs.
Legal Mechanisms Enabling Speculation
- Golden Visa Program: Introduced in 2013, this program offers residency permits to non-EU investors purchasing property worth over €250,000. Since 2014, it has contributed €5.5-7 billion to the real estate market, with 22,298 permits granted, driving up housing prices.
- Non-Performing Loans (NPL) Management: Legal frameworks have been created to facilitate the securitization and transfer of NPLs, allowing banks to offload these loans to specialized servicers and investors. By 2023, the nominal value of mortgage loans managed by servicers was €69.4 billion.
- Real Estate Investment Trusts (REITs): While currently focused primarily on non-residential assets, there is growing pressure to expand their activity in residential property, potentially further financializing the housing sector.
Policy Responses and Their Limitations
The Greek government's housing policy packages (2022 and 2024) have been criticized for:
- Focusing primarily on boosting mortgaged homeownership through subsidized loans
- Relying on market subsidies rather than direct provision
- Providing public resources for property upgrading without conditions to limit price increases
- Allocating minimal resources to social housing programs
The study argues that these market-led approaches cannot yield sustainable outcomes in deregulated markets and may actually worsen the situation by escalating prices and intensifying social polarization.
Comparison with Other Southern European Countries
While all Southern European countries face similar housing challenges, Greece stands out as potentially the only European country without any form of public, municipal, or non-profit housing sector. Unlike Portugal, Italy, and Spain, which have developed various mechanisms for social housing production (albeit limited), Greece lacks the institutional frameworks and administrative mechanisms for social housing provision.
Alternative Policy Paths
The study proposes three main policy pathways for reorienting housing towards social values:
- Controlling market dynamics: Regulating rents, curbing speculative investments, and developing alternative financing circuits.
- Socializing housing: Expanding public and decommodified housing stocks while reducing dependence on private market solutions.
- Building democratic governance: Creating multi-level governance structures to align national and local housing policies with principles of equity and inclusion.
The authors emphasize that these changes require a decisive shift in European Union housing policy and empowering national and local governments to regain control over housing markets.
Conclusion
The study concludes that mainstream policy mechanisms presented as solutions to the housing problem-such as relying on free market dynamics, public-private partnerships, or attracting strategic investment without robust public regulation-are inherently part of the problem. It calls for housing policy to be anchored in social rights, sustainability, and the public good rather than market principles, with both private and public investment channeled towards more equitable housing systems.