Much has been said about the global housing crisis and the role of properties offered through short-term lets. This time, the International Monetary Fund (IMF) is examining the role of short-term rentals in Greece’s housing crisis.
The impact of Airbnb on property prices
A recent IMF report discusses the extent to which high property and rental prices have been influenced by the presence of short-term rental properties.
According to the report, short-term letting does indeed exert upward pressure on prices, primarily in areas with intense tourist activity, such as central Athens, Piraeus, and popular islands. In the rest of the country, the effect is noticeably smaller.
Short-term rental listings now account for approximately 3.5% of the country’s total housing stock. This figure corresponds to about a third of vacant homes and 10% of properties not used as a primary or secondary residence.
What the data from the IMF report shows us
As mentioned earlier, the pressure exerted on property prices by the presence of Airbnbs applies mainly to areas with increased tourism. Across the rest of the country, this pressure is clearly much lower.
The IMF has included data in its report drawn from various sources, such as Spitogatos (Greece’s most prominent property search platform for buying and renting), the Institute of the Association of Greek Tourism Enterprises (INSETE), and the Hellenic Statistical Authority (ELSTAT).
The IMF’s analysis reveals that the impact of short-term lets on sales prices is most pronounced in areas where the majority of the population lives in rented accommodation—that is, areas with a low rate of homeownership. High investment activity is recorded in these locations, which leans heavily towards short-term letting and much less towards long-term rentals or properties for sale.
Foreign investment in real estate has also contributed to this increased demand, partly driven by the Golden Visa programme, whose investment thresholds have recently seen a significant increase.
Supply and demand
For more than a decade, construction activity remained at very low levels. For ten years, no new buildings entered the market, resulting in a significant decrease in the available stock for either renting or buying.
The supply of housing has simply not kept pace with demand. For this reason, the IMF suggests that the Greek government and relevant authorities evaluate existing restrictions on short-term rentals rather than increasing them further, alongside strengthening incentives for landlords to offer their properties for long-term let.
However, the most substantial proposal involves increasing the overall supply by utilising vacant homes, developing social housing through public-private partnerships, and reducing bureaucracy to accelerate construction activity.
The core message of the IMF report is that property prices will only be able to fall once more properties become available on the market.
