According to ICAP’s recent study, short-term lease income will remain at the same level in the three-year period 2019-2021.
The sector of short-term leasing in Greece is changing rapidly through continuous and successive developments, thus affecting the relevant business activity. The decisive role of this transition stage is the statutory declaration and registration of real estate as well as the taxation of income derived from the specific activity.
According to Marko Contoe, Senior Consultant of ICAP’s Directorate of Economic Studies, who has managed this study, particularly in the field of residence, new forms of entrepreneurship have been created thanks to the development of the various sharing economies in recent years. The short-term rental of rooms, apartments and office space through online platforms such as Airbnb or Booking.com has evolved into lucrative and fast-growing business in Greece and has therefore transformed the domestic real estate industry.
The change in rents is directly dependent on real estate prices, as a clear indication of the development of the real estate market at lease level. Analysing the above chart, we observe that rent prices have been on the upward trend until 2011. From then on, there is a decline, but the rate of decline in recent years seems to be slowing down.
In the short-term rental market, a large number of businesses and individuals are active, such as property owners, distribution platforms and management companies. In previous years, there was no fiscal framework, and in combination with the difficult economic situation that many people had, resulted in a rapid widening of short-term rental services and a dramatic increase in the number of listed accommodation.
According to Stamata Panteleou, ICAP’s Director of Finance and Sector Studies, between 2015 and 2018, an average annual growth rate of 9% was recorded in short-term lease income. Here, it should be noted that the data relate only to income derived solely from the rental and for the calculation of the figures, the receipts have been taken into account both from immovable property whose holding did not exceed 92 days (short-term lease) and from properties that have been leased for a longer period but retain the “nature” of short-term lease (family product, furnished rooms, home-based hospitality, etc.). Observing the diagram below, it is evident that the annual growth rate of the market was higher at the beginning of the decade, also taking into account the rate of evolution of short-term rental listings.
Industry stakeholders point out that modifying the legal and fiscal framework is extremely important in order to ensure the sustainability of the short-term lease potential without affecting other key sectors of the Greek economy.