Rental Costs Surge in Athens
According to the latest annual rental survey published by the real estate network of RE/MAX Hellas, renting a 100-square meter apartment in the city center and northern suburbs of Athens now averages between 830 and 920 euros per month. This represents a 5% increase in rental costs compared to 2022.
Renting a 100-square meter apartment in the city center and northern suburbs of Athens today averages between 830 and 920 euros per month, as renting a home now costs over 5% more this year than in 2022.
The survey showed that the average rent in the center now amounts to 8.30/sq.m. and in the northern suburbs to €9.20/sq.m. The cheapest areas are located in the western suburbs, at €6.40/sq.m., while in Piraeus the average rent does not exceed €7/sq.m.
The surge in rental rates is closely tied to factors such as the limited availability of newly constructed rental properties, increased investment inflows, the ongoing popularity of short-term leasing, and the scarcity of high-quality options in older properties. When combined with the challenges of obtaining housing loans with favorable terms, the result is a significant demand-supply gap.
Short Term Lease: A Turnover of 4 billion euros
In 2018, when the short-stay registry was created in Greece, Airbnb’s economy was estimated at €180 million. “In 2022, turnover had risen to 3.3 billion euros, while this year it is expected to reach 4 billion euros,” says Andreas Chiou, president of the Panhellenic Association of Property Managers (PASYDA), which represents 6,500 property owners and management companies operating on said platforms.
While the platform’s growth in seaside tourist destinations is impressive, it is the capital city that is at the center of the controversy surrounding Airbnb.
In specific – central – neighborhoods of the capital, with the most typical example being Koukaki, the presence of Airbnb has become more than noticeable, as a result of which many permanent residents leave their neighborhoods, either by putting their apartments on the platforms and renting other properties, or by selling them – often to short-term rental companies. In Koukaki we find 1,072 Airbnb listings, the historic center (commercial triangle – Plaka) is, unsurprisingly, the area with the most listings on the platform, with 2,317. Many listings also appear in the wider area of Exarchia with 928 and in Neos Kosmos with 911.
Greece is Regulating Short Term Rentals
The Greek government aims to regulate the short-term property market by implementing several key measures.
- In particular, with regard to real estate managers and large companies, what is being considered is for them to become legal entities and receive a special operating mark. In these cases VAT and accommodation tax will be imposed as in hotels. VAT exception on rental income will only be retained for individuals who have registered a certain number of properties under their VAT taxpayer number. In this way, individual landlords will be supported.
- Limitations will be set on the number of homes that can be rented out by a single VAT number.
- Restrictions will be set on time limits regarding the lease of the houses for short-term lease in cooperation with the municipalities.
- There is also a consideration of the need to issue special licenses for multi-apartment buildings exclusively intended for short-term rentals. Such properties will be considered tourist accommodations and will subject to relevant regulations.
All changes will take effect from January 2024.
These interventions were announced by the prime minister himself. In particular, Kyriakos Mitsotakis spoke about “structural intervention” which “responds to an issue that we have discussed many times and that is none other than the unethical short-term rental.”
“Yes, we want short-term leasing, it is a competitive product that supports the Greek economy and the income of property owners, but it is an activity that in various regions of the country has sent rents soaring and distorted competition, especially in tourism,” he said. “From January, therefore, the income from such leases, from three or more properties, will be subject to VAT and the fees applicable to hotels and rooms for rent,” he noted.
Foreigners Keen on Buying Properties in Greece
One in two foreign real estate buyers prefer Greece for the purpose of investment, while one in five proceeds to purchase for owner-occupied housing, according to the findings of survey performed by RE/MAX Greece.
Among the five most popular nationalities of foreign buyers in Greece, Israel ranks 1st, followed by China and Germany in 2nd and 3rd place respectively. The top five is completed with Bulgaria and Turkey. Purchases were also recorded from other dominant EU countries, Italy, France and the Netherlands and the United Kingdom among non-EU countries.
In Attica, China is in first place, Israel in second, followed by France, Germany and the United Kingdom. Finally, sales were also made from countries in the Middle East (UAE, Lebanon, Iran, Syria) as well as Turkey.
Based on the data of the specific survey, apartments were the most popular choice for foreign buyers at a rate of 46%, closely followed by detached houses at a rate of 24%. Maisonettes gather 10%, plots of land 8%, plots of land 7%, while commercial properties do not seem to have been particularly preferred, as they concern just 5% of all sales that took place.
According to the data of the Bank of Greece, in 2022 there was an inflow of capital into the real estate market from foreigners of the order of 1.975 billion euros, when in 2021 the corresponding amount was 1.176 billion euros, i.e. an increase of 65%. In the first quarter of 2023, foreign direct investment in residential real estate reached 500 million euros. From the countries outside the European Union, the largest capital inflow (1.26 billion euros) in 2022 was from countries such as Singapore, Hong Kong, Switzerland, the United Kingdom and the USA.