The real estate market in Greece is booming because of an extraordinary amount of sales to foreigners who want to receive the so-called “Golden Visa“, while an increase in the number of people who short-lease their apartments to platforms like Airbnb is driving up rent prices.
According to a Deutsche Welle report based on a story published in Swiss newspaper Neue Zurcher Zeitung, real estate prices in Greece dropped significantly during the years of the economic crisis.
However, a new market was simultaneously opening up — that of foreigners from outside the European Union who want to receive a residence permit in an E.U. member state. The “Golden Visa” program in Greece gives a residence and work permit to any individual and their family if they invest a minimum 250,000 euros in real estate in the country.
This has had an enormous impact on real estate prices all over Greece. Just a few years ago, houses were selling well below market value, and now most of them are overpriced, with owners aiming to sell them to foreigners who wish to take advantage of the residence permit program.
The report notes that in comparison with other countries offering similar favorable conditions to attract foreign investment, the Greek program is the cheapest of its kind. In Greece one can obtain a renewable five-year residence permit for 250,000 euros, whereas in Portugal the same residence permit is offered, but the visa program begins at 350,000 euros and goes up to 500,000.
In addition, the Greek program offers more generous arrangements for the rest of the investor’s family. Since the program’s inception in 2013, citizens from non-E.U. countries have invested more than one billion euros in the Greek housing market.
The boom in the visa market coincides with an impressive growth in tourism. Financially-stricken Greek citizens have discovered in the past several years that they can earn a decent income by leasing their property to visitors from other countries.
As a result, in several areas in Athens, and especially in the center of the capital city, rent prices have reached pre-crisis levels, and have gone even higher in some places. More than 50,000 houses in Greece are currently registered on Airbnb-like platforms which cater to tourists.
In Athens, more than 12,000 apartments are now being rented through Airbnb. Central areas of the city such as Exarchia or Koukaki, which have seen decades of neglect, are now facing unprecedented economic development. Rents have increased an average of 35 percent in the above-mentioned neighborhoods over the last year.
Despite the slight recovery of the Greek economy, purchasing power remains limited at the present moment. The number of citizens who are unable to pay the high rents is growing.
The sky-high rental prices, and the noise that visitors tend to make while on holiday, have caused residents in many apartments all over the country to complain. But like it or not, Airbnb and the visa program have changed Greek real estate and the Greek economy — perhaps forever.