Empty Homes and Short-Term Rentals Deepen Greece’s Housing Crisis

Protothema

The International Monetary Fund has warned that Greece is facing a severe housing affordability crisis driven by deep structural imbalances in the real estate market. At the center of concern is the widening gap between the use of properties for tourism and the need for affordable long-term housing, as well as the high share of vacant and inefficiently utilized homes.

Housing distribution in Greece

The IMF notes that Greece ranks among the European leaders in housing stock per capita. On paper, the country does not face a housing shortage. However, around 35% of the total housing stock is not used as a primary residence, while approximately 12–13% of homes are completely vacant.

As a result, the crisis is driven not by an overall lack of housing, but by inefficient use of existing stock. Many properties are old, energy-inefficient, legally complex, burdened by shared ownership, or require costly renovation.

At the national level, the market may appear well supplied, but in high-demand areas such as Athens, Thessaloniki, major tourist destinations, and economically active regions, suitable housing remains limited.

Short-term rentals as a pressure factor

The IMF places particular emphasis on short-term rentals. According to data from INSETE (the Institute of the Greek Tourism Confederation), listings in this segment increased by 240% between 2017 and 2024, rising from under 100,000 to more than 230,000 properties.

This represents about 3.5% of Greece’s total housing stock, 10% of unoccupied properties, and 29% of vacant homes.

Short-term rentals are concentrated mainly on tourist islands, in central Athens, and in Piraeus — precisely where housing pressure is already highest. The number of properties available for long-term rental is declining. A higher concentration of such units is associated with rising home prices, particularly in areas with lower homeownership rates.

Foreign demand and Greece’s Golden Visa program

International demand has also played a significant role in price growth. After the sharp decline in property values during the financial crisis, Greek real estate became increasingly attractive to foreign buyers, including members of the diaspora.

Low prices, expectations of capital appreciation, tax incentives, and the Golden Visa program contributed to investment inflows. Greece has already tightened Golden Visa requirements by increasing minimum investment thresholds. However, successive regulatory changes may have triggered bursts of buying activity as investors rushed to complete transactions under previous rules.

Price pressures driven by foreign capital have been unevenly distributed. According to the report, property values are significantly higher in Greater Athens (Attica), Thessaloniki, and major tourist destinations compared to the rest of the country.

Housing price growth in Greece slows after strong expansion

According to the Bank of Greece, the housing market has begun to change, a trend that became more evident in the first quarter of 2026. Residential property prices rose by an average of 5.7% over 12 months.

This follows stronger growth in previous years: 9.1% in Q1 2024 and 8.1% in 2025. Overall, the pace of price increases has slowed by nearly 3.5 percentage points over two years.

The slowdown is broad-based. New-build homes (up to five years old) rose by 6%, remaining the most dynamic segment, while older properties increased by 5.5%.

In Athens, prices rose by 5.2%, below the national average. Thessaloniki recorded a stronger increase of 6.4%, while other major cities saw a 5.4% rise. In urban areas overall, growth averaged 5.6%, with the strongest increase in regional markets at 6.9%, making the periphery the fastest-growing segment.

Tourism sector under pressure

The housing shortage is increasingly intertwined with Greece’s tourism economy. In the most popular locations, housing prices are high and rental supply is limited, making it difficult for both locals and tourism workers to find affordable accommodation.

While the IMF does not specifically analyze seasonal worker housing, its broader findings suggest a structural risk: reduced labor mobility and lower productivity, which could ultimately affect competitiveness in an economy where tourism remains a key sector.

Households under housing cost pressure

Housing affordability is already a severe issue for many families. The IMF estimates that in 2025 median housing costs, including mortgage payments, exceeded one-third of disposable income.

Around two in five households are classified as overburdened, spending more than 40% of their income on housing. Another 20% spend between 30% and 40%, placing them in a vulnerable financial position.

The burden is particularly heavy for renters, low-income households, single-parent families, and individuals living alone. Renters in Attica and Central Macedonia (including Thessaloniki) face especially high risks of excessive housing costs.

IMF recommendations for Greece’s housing market

The IMF’s main recommendation is to activate the large stock of unused housing. This would require a combination of incentives and disincentives, including renovation subsidies, energy-efficiency programs, tax incentives for long-term rentals, and measures increasing the cost of keeping homes vacant in high-demand areas.

At the same time, the Fund urges caution regarding restrictions, noting that short-term rentals support tourism, local incomes, and economic activity, and that any policy response must consider both housing and economic effects.

It also warns that limiting short-term rentals will not automatically return large numbers of homes to the long-term rental market, as many properties are not directly interchangeable.

Geographically targeted restrictions may also shift demand and price pressure to neighboring areas rather than solving affordability issues at a broader level.

Conclusion

Analysts at International Investment note that Greece has already introduced a range of regulatory measures that are gradually reshaping the economics of property ownership. Tax changes, tighter rules for short-term rentals, and rising compliance costs are reducing returns for owners, particularly in tourist and urban markets.

At the same time, Greece continues to maintain its Golden Visa program, remaining one of the few EU countries where real estate investment is still directly linked to residency rights. Against a broader European trend of tightening or phasing out such schemes, this continues to support foreign demand and intensifies competition for housing in the most attractive locations.

Overall, Greece’s real estate market is moving toward greater segmentation, with future developments depending on how effectively policymakers balance investor attractiveness with domestic housing needs, as well as on possible new EU-level regulatory actions affecting residency-by-investment and short-term rental frameworks.