The State Budget Office in Parliament (GBO), in its third working paper published today, Tuesday, titled: “Prices and Availability of Residential Properties for Rent and Sale in Greece: An Approach Based on the Actual Potential for Utilization of Residential Properties.”
In its study, the General Secretariat for Public Property, after presenting detailed data on the current situation in the housing sector, it proposes: resolving outstanding inheritance and land registry issues, introducing tax incentives for long-term leases, supporting renovations, regulatory interventions in the short-term rental market, and additional public investment in housing.
More specifically:
Efforts to resolve outstanding inheritance and land registry issues: Completing and streamlining the Land Registry and reducing notary fees for low-value real estate transfers could help bring vacant homes back into use.
Tax incentives for long-term leases: Long-term leases can be made more attractive than short-term ones by introducing changes to the current tax framework, such as a reduced tax rate on income from long-term leases.
Support for Renovations: Targeted subsidies for renovations or green loan programs, provided that the properties are subsequently placed on the long-term rental market for at least a specified period, could help address both energy and housing challenges.
Regulation of short-term rentals: The introduction of different tax regimes, licensing requirements, or fees in high-demand areas could help shift properties from the short-term to the long-term rental market. These measures should balance the benefits for housing with the impacts on the tourism sector.
Additional public investment in housing: Policies that stimulate new construction—through faster permitting, lower construction costs, and targeted land-use reform in urban areas—are essential, but they must serve as complementary measures, not substitutes for measures aimed at activating the existing housing stock. In particular, public investment in social and affordable housing in urban areas with high demand could expand supply in segments of the market not covered by private construction activity.
The Problem
The agency notes that the surge in housing costs in Greece in recent years is due not only to the limited recovery of construction activity and lower investment in new housing following the economic crisis, but also to the fact that a large portion of existing housing remains vacant and is not available for long-term rental or sale.
While the total number of homes in Greece saw a slight increase between 2011 and 2021, the number of homes available for rent decreased by more than 10% during the same period, and the number of homes listed for sale fell by one-third.
Examining data from the latest census conducted by ELSTAT, the authors note that Greece has a large housing stock, but approximately one-third of these dwellings are reported as vacant.
Specifically, according to the 2021 Population and Housing Census, the total number of dwellings exceeds 2.2 million, but 34.5% of them are vacant. At first glance, this seems inconsistent with rising residential real estate prices, but it is not, because a home reported as vacant is not necessarily available on the market for rent or sale.
Between 2011 and 2021, according to the respective censuses, the total number of dwellings in Greece increased by 3.5%. However, during the same period, the number of vacant dwellings available for (long-term) rent decreased by 10.4%, and the number of vacant dwellings offered for sale fell by 33.1%. At the same time, the number of inactive vacant homes—that is, vacant homes that were neither offered for rent nor for sale—increased by 6.1%, from 1.71 million to 1.81 million homes.
Thus, while the total housing stock increased, the stock of homes available on the market for rent or sale declined to 72.5% in 2021, compared to 73.2% in 2011. “The difference may seem small in percentage terms, but it is economically significant because it involves a very large housing stock,” the study emphasizes.
In fact, the study clarifies that this decrease is a conservative estimate, as “it does not fully account for housing units that may have effectively been withdrawn from the long-term rental market because they are available for short-term rental or fall into other availability categories” (e.g., they remain unavailable due to legal or inheritance issues, poor condition, use by foreigners, seasonal use, or because they are located in areas where there is no demand for housing).
The research paper does not subscribe to the view that short-term rentals alone explain the worsening difficulties in the housing market. On the contrary, recent data suggest that their direct impact is likely to be limited overall.
The partial recovery of the construction sector is not sufficient on its own to resolve the housing problem
An analysis by the State Budget Office in Parliament notes that in public discourse, a common explanation for the rapid rise in housing costs in Greece is that the number of new homes being built is insufficient to meet demand.
Construction activity essentially “froze” during the debt crisis and has only partially recovered: gross value added in the construction sector fell from nearly 18 billion euros in 2007 to less than 5 billion euros during the 2010s. Building permits also plummeted after 2007 and remain well below pre-crisis levels.
Investments
At the same time, residential investment remains much lower compared to pre-crisis levels: in 2025, it amounted to just 3.1% of GDP, compared to an average of 5% in the European Union, whereas in the mid-2000s it exceeded 10% of GDP.
Part of this sharp decline has recently been offset by an increase in foreign direct investment in the real estate market, which has exceeded 800 million euros annually since 2019. However, these inflows mainly concern specific segments of the market and do not necessarily translate into an expansion of the housing stock available on the domestic market.
In any case, as emphasized, the above does not constitute a complete explanation of the problem, but rather part of the explanation. The total housing stock has remained fairly resilient and is projected to return to pre-crisis levels by the end of the current decade. Consequently, it is not only the total number of homes that is of decisive importance, but also their actual availability on the market.