Housing crisis in Greece: a “perfect storm” in the real estate market

Housing crisis in Greece has become one of the most difficult social and economic challenges of the last decade.

The true Gordian Knot of the housing market remains a challenge for powerful analysts and policymakers as they try to answer key questions.

The crisis remains a serious problem for households and the biggest social challenge of the decade.

Despite the fact that the country maintains one of the highest levels home ownership in Europe, access to affordable and quality housing has become extremely difficult for a large part of the population, especially young people.

Anatomy of a crisis

According to the latest data, the real estate market is characterized by the following trends:

• house prices are rising almost twice as fast as disposable incomes. In 2024, Greeks spent on average 35.5% of their income on housing (versus 19.2% in EU);
• at the beginning of 2026, rent increased by an average of 6% compared to the previous year. In the center of Athens and in the western suburbs, pressure remains extremely high;
• There is a huge stock of closed facilities (approximately 750,000–790,000 throughout the country), many of which are old and require major renovation.

Housing in Greece has evolved from a basic social right in recent years into a complex and intractable problem.

Main bottlenecks

The main causes of the problem include:

• massive transformation of thousands of apartments into tourist housing;
• attracting foreign investors through the program “golden visa”, which increased the value of real estate, especially in Attica and Thessaloniki;
• a significant part of the housing is energetically outdated. Without modernization, such facilities remain outside the market, reducing supply;
• a sharp rise in prices for building materials and a serious labor shortage.

New study provides a more complete picture of housing market conditions in Greece Alpha Bank. The main research question is how a country where a significant portion of wealth is invested in real estate and maintains high levels of homeownership ended up in a severe housing crisis.

“Legacy” of the crisis and the aging housing stock

The economic crisis has left its mark not only on public finances, but also on the state of the housing stock. Today, aging buildings are one of the key obstacles to solving the housing problem.

According to the study, the investment decline during the crisis years hampered the renovation of the housing stock. Investment in housing declined by an average of 25% annually, and by 2017 it accounted for only 5% of the country’s total investment. Since 2018, they have been gradually recovering, but remain significantly below pre-crisis levels.

Almost two-thirds of housing was built before 1990, and only 2.6% of properties were built after the start of the crisis. Six out of ten major homes require energy upgrades – a factor that will shape both investment decisions and social needs of the next decade.

Empty apartments: an underutilized resource

The paradox of the Greek real estate market is that when there is a shortage of supply, hundreds of thousands of apartments remain closed, creating an artificial shortage.

According to the study, 35% of standard housing in the country is unoccupied – the third highest figure in the EU. Of these, 22.5% are secondary or suburban housing, and 12% are actually empty properties. Although the number of empty apartments has decreased by 11.6% since the previous census, the number remains high.

Reasons include multiple ownership, complications between heirs, high costs of renovations and energy upgrades, and relatively low risk-adjusted financial returns. At the same time, every fifth owner is considering the possibility of renting out housing, which could potentially increase supply.

Pressure from large cities

The concentration of population in Athens and Thessaloniki remains a key factor of pressure on the market. More than 70% of the population lives in cities and suburbs, and almost half live in the two largest metropolitan areas.

Attica concentrates 35% of the population, produces 46% of GDP and brings together almost 40% of the country’s enterprises. Demand for housing here significantly outstrips supply, which supports rising purchase and rental prices.

Athens, especially the historical center and coastal areas, is undergoing a profound transformation. The overpopulation of the capital region creates a “bubble” of demand that the market is unable to absorb.

Shortage of social and affordable housing

Chronic shortages of public and affordable housing are adding pressure to the market.

Increased satisfaction and anxiety for the future

A repeated study records an increase in satisfaction with current housing by 9%, mainly among owners. Renters remain the least satisfied group.

About 70% of respondents expect further growth in rental rates. Among landlords, this figure is lower – 59%.

The perception of pricing drivers is changing: the sharing economy, especially in certain areas, is seen as the main driver of price increases, followed by government measures.

Despite the pressure, intention to purchase a home increased by 8% and by 13% among renters.

Program “Σπίτι μου II”

Interest in the program “Σπίτι μου II” (My House 2) exists, but is not widespread. 24% of those interested have applied or planned to apply, while 45% are ruling out such an opportunity due to age or income criteria. Overall, 66% are positive about the program’s concept.

Towards a new housing policy

The transition to a new housing policy in 2026 becomes a necessity for social stability. The “social anti-parochial” mechanism, which was advertised as a solution to the problem of affordable housing, is being implemented extremely slowly. By the beginning of 2026, only a limited number of new apartments had been commissioned.

The program to bring closed houses into circulation has also been criticized: subsidies are considered insufficient to overhaul properties that have stood idle for decades.

Despite the new restrictions, Airbnb continues to reduce the city’s housing stock, and control mechanisms remain understaffed.

The government also faces criticism that concessional lending programs have contributed to rising prices. The massive emergence of buyers with approved loans has pushed sellers to increase the value of old properties.

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