Rents and A Midsummer Night's Dream

Written by Giorgos Kiagias

Protests over rising rents are heard everywhere. These protests are, of course, not directed at God or fate, but at the owners of long-term rental homes and Airbnb stations.

As always with complete mood and logic out of order.
So let's put the logic to work.

Everything I will write is about Chania only, this is where I live, this is where I create my experiences. But Chania is a city with high rents, so it can be useful as an example for similar expensive cities in Greece.
So let's take a two-room apartment whose rent in 2014 was 350 euros per month.
What happened since then? How much has the general cost of living increased? I think, conservatively, 30%.

Therefore, the rent collected by the landlord is 30% less. If he wanted to maintain the rental value, he would raise the rent by 30% (105 euros) and bring it to 435. But ENFIA also came up with (now, after many cuts) around 8%. 28 euros here, they earn 435+28 = 463 euros in rent making it 350 euros in 2014.

However, the rent collection tax has also been raised from 10% to 15% (for reasons of convenience, and so as not to become more objectionable, I do not include in the calculation cases in which rent collection has ended) 12,000, so the tax goes to 35%), so we add 5%, or 17.5 euros. We reach 463 + 17.5 = 480.5 euros.

Indeed, a two-room apartment that rented for 350 euros ten years ago can now be found for 420 to 500 euros. A two-room apartment, which now costs €580, might have cost €480 10 years ago, because it was luxury, i.e. fully furnished with expensive furniture and all electrical appliances. Furniture and appliances will cost around 20,000 euros, with an additional 100 euros rent per month: payback in 16.66… ​​​​​years. At a time when the electrical appliances and furniture might need replacing, the housekeeper somehow bought his electrical appliances and furniture.

We hear the owners are getting rich.

A man buys a pair of shoes for only 120,000 pounds (without loans and interest). From the rent of 480, he will receive 350 euros after taxes and other expenses. Until final depreciation, almost 30 years will pass with €350 depreciation per month, and until then we can't talk about profit. After 30 years, he earned 350 euros every month. Don't call him rich.

But now I will hear how he manages with a salary of 800 euros and another with a salary of 1200 and a family and the other and the other.

Good question, but it's not about the guy putting his house up for rent, or at least it's not about him any more or less than all the other people. There is no moral obligation on anyone to sacrifice part of their economic interests in order to solve other people's economic problems – as long as it does not always involve grudges.

Since the increase in rents is mainly due to inflation and increased taxes, don't expect rents to drop significantly if many Airbnb properties close.

And if the price of meat falls, souvlaki will cost no less than now, the price of electricity has fallen significantly, but bread still costs 1.30-1.40, and has not returned to 1 euro. To think that with fewer Airbnb's, the above €480 apartment would cost less is a midsummer night's dream…

*Greek national and airbnb owner