Soaring Rents Strain Greece’s Recovery
Housing Costs Challenge Greece’s Economic Momentum
Greece’s economy is rebounding strongly from the 2009–2018 debt crisis, with growth exceeding the European Union average, early repayment of bailout loans and record tourism revenues. Yet beneath the macroeconomic recovery, rapidly rising rental costs are emerging as a structural risk to domestic stability and consumption.
Housing Shortage and Structural Supply Constraints in Greece
A key driver of the crisis is insufficient housing supply. According to a 2025 Piraeus Bank report, Greece’s major cities face a shortage of approximately 180,000 homes available for rent or sale. Construction activity collapsed during the crisis years and has not fully recovered, leaving demand far ahead of supply.
Foreign investment programmes have added further pressure. Since the mid-2010s, about 20,000 properties, mainly in Athens, have been sold to foreign buyers under Greece’s golden visa scheme, based on Migration Ministry data. An additional 150,000 properties have been converted into short-term tourist rentals, reducing long-term availability.
Rent Growth Outpaces Wage Increases in Greece
Over the past five years, nationwide weekly rents have increased by 42.4 percent, compared with only 8.2 percent growth in the preceding five-year period up to January 2021. In Athens, rents rose by more than 50 percent between 2019 and 2024. By contrast, average two-bedroom rents increased 26 percent in Madrid and 14 percent in Paris during the same timeframe.
Average Greek salaries rose approximately 27 percent over that period, lagging behind rental growth. Eurostat data indicate that Greek households allocate a larger share of income to housing than any other EU country.
Impact on Households and Domestic Demand
The Small Enterprise Institute of Greece reports that six in ten households say their income does not last until the end of the month. More than 83 percent of Greeks are unable to save, and 40 percent reduced spending on restaurants and entertainment last year. Economists warn that reduced consumption and rising debt burdens may weigh on Greece’s broader economic rebound.
Home ownership has also declined, falling below 70 percent in 2024 compared with around 77 percent in 2009. In high-demand urban districts, rental viewings can attract hundreds of applicants, illustrating the severity of the supply-demand imbalance.
Urban Displacement and Long-Term Risks
As foreign buyers acquire central properties and landlords raise rents, long-term residents are increasingly pushed to suburban areas. This trend alters the social composition of city centers and affects labor mobility, particularly for middle-income workers.
Analysts caution that without structural measures to expand housing supply and rebalance short-term and long-term rental markets, affordability pressures could intensify even as headline economic indicators remain positive.
As reported by experts at International Investment, accelerating rental inflation in Greece represents a structural constraint on domestic demand and economic resilience, highlighting the need for coordinated housing policy reforms to sustain long-term growth.