From 2010 to the present, the accommodation available for short-term rent in Greece has grown steadily. More specifically, the figures show that the number of lodgings from 132 in 2010 increased to about 126,000 in 2018 with the available beds in Attica having far outpaced the respective beds of hotels. Based on research, Athens is the cheapest city among 18 European cities and, apart from Budapest, the cheapest city, where the average cost of renting through Airbnb amounts to 61 euros. At the same time, short-term leases go more under professional management.
The above findings arise from a study by Arbitrage Real Estate Advisors, which, in conjunction with a survey conducted by Airbnb itself in Athens, reports that more than half of the properties (53%) advertised on its platform are managed by professionals or owners – investors of the area. Similarly, high rates are recorded in Prague (56.6%), Budapest (50.3%) and other famous European destinations such as Barcelona and Madrid.
According to a recent study by the Hellenic Chamber of Commerce, the rapid expansion of the short-term lease took place in the years 2016-2017. Today’s annual turnover is estimated at around 1 billion euros, on the basis of the income from accommodation costs, totalling more than 1.7 billion euros if other visitors’ expenses are also taken into account.
According to the Arbitrage study, the main reason for booming short-term leases with the use of relevant digital platforms such as Airbnb, HomeAway, Booking and Trivago is the hosting of foreign visitors. This has evolved the short-term lease market in a promising business and investment sector in domestic real estate as transparency and availability of information and industry information as well as access to financial data have allowed benchmarking. This has led to renovations of residential areas through adoption, among others, of technologically advanced interior design and more luxurious decoration.
The growth of the short-term lease market has attracted a large number of investors, both domestic and international, aiming at future surpluses from the resale of real estate that they have acquired and invested. As a result of growth, new needs have emerged and the market has now begun to move to a more professional operating environment, as has happened in other countries, with an increasing number of owners taking advantage of more than three properties. At the same time, due to increasing competition, there is a growing demand for more professional property management services.
Real estate management in today’s Greek market is conducted by existing real estate companies that pre-existed the relevant digital platforms, such as real estate agencies and residential development companies. Such companies turned to short-term lease due to a lack of purchasing demand as the market shifted rapidly to short-term lease. As a result, there are also many newly established companies that offer full property management services to the owner, from advertising it to booking and cleaning. They are mainly addressed to owners who are either unable or unwilling to proceed with a similar process. These companies usually receive a rate ranging from 15% to 30% of the income earned by each owner through their short-term leases.
Data on Attica
It is estimated that in Attica there are approximately 48000 beds rented on digital short-term rental platforms compared to 28000 hotel beds. According to Airbnb’s official data on the development of the market in Athens, approximately 500,000 nights are booked annually. The related short-term leasing platforms account for about 10% of the accommodation offer for the tourist market. The main areas for the offer are Athens, Crete and the southern Aegean islands, with the other island regions showing a sharp increase. The six regions with high tourist activity hold an average of 87.5% of active accommodation during the year.
Data on Athens
According to recent data, the Greek capital has over 5,200 accommodations in total, of which 4300 are houses or apartments. More specifically, the average overnight stay is 96 days per year, the average daily cost is 52 euros, and the monthly income of the owners is around 380 euro / month.
In the historic centre of Athens, as well as in other areas of high demand, revenues are rising significantly, especially during months of high tourist demand, making short-term rent more profitable, even if extra costs such as management and utility bills are taken into account.
More specifically, in the historical centre of Athens, there are currently almost 1500 accommodation listings, with an average price of €70 per night and the total occupancy rate at about 35%. This translates to €750 monthly income, which is significantly high compared to a conventional long-term lease. By comparison, such a rent can be earned by an owner only in newer apartments of more than 100 square metres, mainly in the southern or northern suburbs. This fact is verified by the strong investor interest in the region in the last two years.
The penetration of the short-term lease has significantly changed the real estate market, such as the rental market. Today, the cost of renting an apartment in Koukaki, an area that has exploded and expanded due to short-term rentals, is higher (in proportion to size) than in Ekali. It should be noted that Koukaki was included in the top ten destinations worldwide on the Airbnb platform two years ago. At the same time, demand exceeds the supply of short-term rentals in Athens, and as a result, new areas are constantly emerging as destinations such as Pagkrati, Ambelokipoi and the coastal front of Athens (the Athenian Riviera).
The reaction of hotel owners
The short-term lease market has been rapidly established and is now seen as the main competitor for hotels, depending on the region and the public. For example, a corporate traveller looking for comforts for his short trips is not the prime target of short-term leases, as opposed to a price-sensitive traveller. The same applies to luxury tourism, visitors tend to prefer the hotels in question because of the additional amenities and services offered. At this point, it should be noted that even such ‘stereotypes’ tend to change as competition is rising at a rapid pace.
As pointed out in the relevant Arbitrage study, soon, private property investors will compete with large hotel groups that react to market developments. For example, Zeus International, which manages the Wyndham brand in Greece, has already begun since the beginning of the year the operation of a complex of furnished apartments in Karaiskaki Square next to the hotel of the same name. This particular band is aimed at a young audience. At the same time, is preparing another complex of furnished suites in another property, also at Karaiskaki Square, which is addressed to a higher demand audience. Meanwhile, at the international level, hotel groups such as Accor have acquired popular short-term leases in order to enter the industry and gain market share.