Greece’s housing market has become increasingly unaffordable as house prices have risen much faster than incomes. An International Monetary Fund selected issues paper prepared for its consultation with Athens found that Greek house prices have climbed about 85% since 2017, while disposable income per capita rose only 47%.
Most of the gap opened after the pandemic. Since the fourth quarter of 2020, prices are up 61%, and the IMF estimates current overvaluation at around 10%. Asking prices in Attica, Thessaloniki, and major tourist hubs are well above the rest of the country.
Homeownership Has Moved Out Of Reach
Buying a home has become difficult for the typical Greek household.
On standard lending assumptions, the median household in 2024 fell 7% to 17% short of the income needed to qualify for a mortgage, depending on the loan-to-value ratio.
Even households that meet income requirements face a major down-payment barrier. At a savings rate of 10% per year, accumulating the required down payment could take as long as 24 years.
Rents Are Now Rising Quickly
Rents stayed stable for longer than house prices, but later turned sharply upward.
By 2025, rent inflation had reached 10%. Asking rents per square meter are rising even faster, suggesting more pressure on new leases.
The pressure is strongest in Attica and Central Macedonia, the regions around Athens and Thessaloniki.
Housing Costs Are Straining Household Budgets
Median housing costs, including mortgages, passed one-third of disposable income in 2025.
The IMF reports that:
- Roughly two in five households spend more than 40% of income on housing.
- Another one-fifth spend between 30% and 40% of income on housing.
The 40% threshold is commonly used by economists to define housing-cost overburden.
Arrears also point to stress. Using EU Statistics on Income and Living Conditions data, which the IMF cautions may understate income, the Fund reports that 41.8% of households were behind on housing payments.
The risk is most severe for low-income households that rent or carry a mortgage. For this group, the modeled probability of housing-cost overburden is above 90%, compared with about one-third for higher-income households.
A Shortage Alongside Empty Housing
Greece’s housing crisis exists despite a large housing stock.
The country has one of the highest dwelling counts per capita in the European Union, and more than 60% of households own their homes outright with no mortgage.
However, a large share of housing is not available as primary residence stock:
- 35% of the housing stock serves as something other than a primary residence.
- 12% to 13% of the stock is vacant.
Much of the empty housing cannot easily return to the market. More than half of unoccupied units were built before 1980. Bringing them back into use can require renovation costs that many owners cannot finance.
Other barriers include fragmented co-ownership and unresolved building-compliance issues that delay or prevent sales.
Energy efficiency is another problem. Only 7.4% of Greek dwellings have an energy rating of B or higher, and Greek homes use around 65% more energy per square meter than Portuguese homes.
What Is Driving The Imbalance
Housing demand has risen sharply since 2017, and the IMF attributes much of the increase to investors rather than resident buyers.
Foreign investors were initially attracted by post-crisis valuations and expectations of capital gains. Demand was also supported by Greece’s golden visa program and tax incentives, including pensioner tax breaks and a lower unified property tax, known as ENFIA, since 2022.
Resident buyer demand remained weaker and skewed toward higher-income households paying in cash. First-time buyers have returned since 2023, supported by subsidized MyHome loan programs.
Golden Visa Effects
The IMF notes that Greece’s golden visa threshold changes created “announcement effects.” Investors rushed to buy before higher minimums took effect, then pulled back after the changes were implemented.
Under a 2024 reform, Greece raised minimum golden visa investment thresholds to as much as €800,000, approximately US$925,000, in the most expensive zones.
The Fund cites a 2026 study by Karamanis and co-authors finding that higher thresholds pushed investor activity into neighboring markets. This suggests a displacement of demand rather than new housing supply.
One supply channel remains outside the IMF’s main analysis. The reform kept a €250,000 tier, approximately US$289,000, for converting commercial buildings into residential use.
This route has drawn golden visa capital into conversion projects estimated to add 3,000 to 5,000 homes across Athens by 2027.
However, those homes are premium by definition. At €250,000 and above, they sit in a price bracket the IMF says most Greeks cannot afford. As a result, they may widen the rental pool without significantly improving affordability.
Why Supply Remains Stuck
Supply has increased on paper. Listings for sale and rent have risen markedly in recent years, based on IMF analysis using data from property platform Spitogatos.
The problem is a mismatch between what is available and what households need.
Demand is concentrated in:
- Smaller units.
- Metropolitan areas.
- Especially Attica, where population density is 20 times the national level.
New construction cannot close the gap quickly. The main constraints include:
- High building costs.
- Labor shortages.
- Zoning friction.
- Permitting delays.
- Regulatory uncertainty.
Household formation is also rising even as Greece’s population shrinks. Since 2011, the share of single-person and single-parent households has increased by 12 percentage points, pushing up demand for housing units.
Government Policy Response
Athens is using several policy tools at once.
On the demand side, measures include:
- Subsidized loans for first-time buyers.
- Other help-to-buy support.
- Rental refunds.
On the supply side, measures include:
- Renovation programs.
- Tax breaks to move idle housing into the long-term rental market.
- Curbs on short-term rentals in targeted areas.
- Planned social housing.
- Planned student accommodation.
- A wider housing strategy based on a clearer map of housing need and housing stock.
IMF Recommendations
The IMF’s prescription focuses heavily on supply.
The Fund recommends mobilizing idle housing stock by combining renovation incentives with penalties for leaving homes empty.
It also calls for an assessment of whether short-term rental restrictions are actually effective, as well as reducing regulatory uncertainty that discourages construction.
The unresolved question is whether these measures can move quickly enough to outpace demand in Athens and Thessaloniki. Based on current numbers, the affordability gap is not closing.
Source article: www.imidaily.com
