Greeks Give a Third of Their Income to Pay for Housing. What is the Situation in Other EU Countries?

On average, residents of the European Union spend 20% of their income on housing costs. These figures were presented in Eurostat’s report, “The Share of Housing Expenses in Household Disposable Income.” Housing is the largest expense category, with food expenditures ranking second at just 12%. This means that rising housing costs have the most significant impact on Europeans’ finances.

However, this 20% average is just a general figure — actual housing expenses vary greatly across different countries. Greeks and Danes pay the highest share of their income for housing, between 25% and 35%, while Icelanders and Cypriots pay the least, at just 10–11%.

Data shows a clear trend of increasing living costs across Europe. From 2020 to 2023, overall housing expenses rose by 1.2 percentage points—a moderate increase. However, preliminary data from five EU countries (Denmark, Germany, Belgium, Estonia, and Latvia) suggests that in 2024, the increase doubled to 2.5 percentage points.

How Was the Calculation Conducted?

Eurostat collected data on monthly housing payments, including a full package of utility costs such as water, electricity, gas, internet, and other services. The calculation also took into account mortgage payments (for homeowners with outstanding loans) or rent payments (for tenants). Additionally, it included insurance expenses, mandatory service fees, maintenance and repair costs, as well as property taxes.

For income calculations, Eurostat did not consider only salaries but rather total disposable income. This includes:

• All earnings from employment (including self-employed income).
• Investment and property income.
• Monetary transfers and pensions.

The study utilized the concept of percentage points (p. p.) rather than simple percentages. This is important for measuring changes over time.

For example, in Hungary, the share of income spent on housing was 13.3% in 2022. The increase was 5.7 percentage points, bringing the total to 19% in 2023.

Researchers use percentage points to avoid confusion. For instance, if housing costs were 20% of income in 2022 and increased by 10%, some might mistakenly assume the new share would be 30%. However, in reality, the correct calculation results in 22% (since 10% of 20% is only a 2 percentage point increase).

Why Are Housing Costs the Highest in Greece?

Greece remains in a prolonged economic crisis, which began in the aftermath of the 2008 global financial meltdown. By 2009, the country’s public debt had already reached 130% of GDP, and later it surpassed 180%.

This crisis was triggered by the revelation of financial misreporting, as Greece had manipulated its economic statistics to meet the EU’s entry criteria. Once the truth surfaced, there was a massive capital outflow—both from major businesses and individual investors.

To secure financial assistance from the EU, Greece had to implement strict austerity measures, which included:

• Cuts in salaries and pensions.
• Tax hikes.
• Mass layoffs of public sector employees.
• Reduction in social spending.

As a result, the overall standard of living dropped sharply, and wages declined by 40%. This led to a collapse in demand for real estate, causing a freeze in construction investment and the stagnation of the housing market.

A second major blow to the Greek economy came from runaway inflation. From 2019 to 2024, inflation in Greece rose by 16%, while the average for the rest of the Eurozone was just 1.7%.

This directly affected the real estate market. In the first quarter of 2024 alone, housing prices in urban areas surged by 10.76% compared to the same period the previous year. At the same time, overall construction costs jumped by 20–25%, mainly due to the rising prices of building materials and labor costs.

Due to this sharp economic imbalance, Greek households now spend nearly one-third of their income solely on housing costs, making it the highest burden in the Eurozone.

Housing Costs in the “Big Four” Countries

The economies of Germany, France, Italy, and Spain form the core of the Eurozone, holding the greatest economic and political influence in the EU. As a result, their housing cost trends are more significant than those in peripheral nations.

Among the Big Four, Italy has the most affordable housing market, with households spending just 14.5% of their income on housing. Spain follows closely, with housing costs accounting for 17.2% of income, while France ranks slightly higher at 17.9%.

At the other end of the spectrum, Germany faces the heaviest housing burden, with households allocating a quarter of their income (25%) to housing costs. This level is comparable to the situation in Scandinavian countries—Norway, Denmark, Sweden, and Finland—where the share of income spent on housing varies between 19% and 23%.

Housing Cost Disparities Based on Income

The previous figures referred to households in the EU earning more than 60% of the median income. However, the study also analyzed those earning below this threshold, revealing a significant gap in housing affordability.

Households earning less than 60% of the median income spend an average of 38.2% of their disposable income on housing across the EU—more than twice the share spent by higher-income households (38.2% vs. 16.2%).

This is just the EU average, but the gap varies significantly by country. Cyprus has the lowest burden, with 19.2% of disposable income going toward housing. At the other extreme, Greece once again ranks as the worst performer, where low-income households spend a staggering 62.4% of their income on housing. This is the highest rate in the entire EU, but several other countries also show alarming figures:

• Denmark (57%). Although Denmark has a higher wage level than Greece, property prices, taxes, and utility costs are also significantly higher.
• Norway (48.5%) and Sweden (48.1%). Scandinavian countries previously did not show such high housing burdens, but since 2023, housing costs have surged sharply. In major cities like Stockholm, rent and mortgage payments consume a significant portion of household income.
• Czech Republic (46.7%) and Germany (45.8%). In Czechia, rental housing has become one of the most expensive in Eastern Europe, with rental prices increasing by 50% over the past five years. In Germany, the situation has worsened due to strict construction regulations, leading to housing shortages and rising rents.
• Netherlands (45.7%) and Switzerland (45.5%). In both countries, housing shortages are exacerbated by restrictions on construction in historical areas and the limited availability of land. Zurich and Geneva now rank among the most expensive rental markets in the world.

Let us present all of the above in the form of a summary table.