The real estate market in Southeastern Europe is currently experiencing a period of intense contradictions. On one hand, the region boasts some of the lowest housing prices in Europe, while on the other hand, acquiring a home has become an extremely challenging endeavor. In Greece, for example, homeownership rates remain around 72%, surpassing the EU average of 69.1%.
According to a recent study by Deloitte, Bosnia and Herzegovina hold the title for the cheapest housing prices in Southeastern Europe, with the cost of new homes averaging at €1,315 per square meter. Greece follows closely behind as the second most affordable country, with an average asking price of €1,463 per square meter, followed by Romania at €1,504 per square meter. Serbia ranks higher in terms of housing costs, with prices reaching €1,697 per square meter, while Italy comes next at €2,118 per square meter.
However, despite the relatively low prices, the high cost of housing significantly hinders citizens from acquiring their own homes. In Europe, homeownership rates are at exceptionally high levels, with only 30.9% of Europeans residing in rental properties. Greece, in particular, boasts one of the highest homeownership rates, which is expected to decrease over time due to the continuous rise in prices. During the second quarter of the year, the average property selling price in the country increased by 9.6% compared to the same period in 2023.
Among the countries leading in homeownership rates in Europe are Romania with 94.8%, Slovakia with 93%, Croatia with 91.1%, and Hungary with 90.1%. Germany, on the other hand, deviates from this trend as an exception, with 53.5% of its population residing in rental properties. Similarly, Austria and Denmark have higher percentages of renters, with significant rental rates of 48.6% for Austria and 40.4% for Denmark.
Deloitte’s study also evaluated the economic affordability by examining how many gross annual salaries are needed to purchase a new home. In Greece, on average, 6.8 gross annual salaries are required to acquire a home. This makes Greece more affordable compared to the Czech Republic, where citizens need to invest the equivalent of 13.3 annual salaries to buy a new home. Despite complaints about rising prices, Greek properties remain affordable for foreign buyers, both in the more economical areas and the pricier ones.
The neighboring Slovakia, which was once the most demanding country for purchasing a new home, is no longer the case. In 2023, Slovak citizens had to spend 12.7 times their average gross annual salary to financially sustain a typical new home. Israel, Ireland, and Hungary, on the other hand, require an average of 10.2 gross annual salaries to buy a new home. Bosnia, despite being among the most affordable countries in terms of price per square meter, citizens still need to save between six to eight gross annual salaries to financially sustain a new home.
In Serbia and Croatia, citizens need to save an equivalent of eight to ten gross annual salaries to get a new apartment. Homebuyers in Romania, on the other hand, need to save between five and six gross annual salaries to be able to purchase a new home.
In wealthier European countries, the reality is different. Despite the high cost of homeownership, citizens in countries like Norway and Denmark, due to their high incomes, can more easily become owners of new homes, needing less than five gross annual salaries to purchase their own home.
In conclusion, the real estate market in Southeastern Europe presents a complex landscape of affordability and homeownership rates. While some countries offer affordable housing prices, the high cost of acquiring a home remains a significant barrier for many citizens. As the market continues to evolve, it is essential to monitor these trends and explore potential solutions to ensure housing accessibility for all individuals.