IMF: Greek house prices 85% higher since 2017 — can buyers keep up?

Renters

• Rent inflation reached 10% by 2025, and asking rents per square metre have accelerated further. Expect higher renewal costs and tougher search conditions in Athens and Thessaloniki.
• Nearly 40% of households spend more than 40% of their income on housing, a common threshold for overburden. Renters and low-income mortgagors face the highest risk of arrears.

Investors

• Yield-focused buy-to-let strategies are under pressure from rising purchase prices and higher taxes in some jurisdictions. Price-to-rent ratios have widened in many urban pockets.
• Short-term rental restrictions are tightening in targeted areas; policy risk is material for investors relying on STR income.
• Conversion opportunities (the €250,000 route) may create supply but these units will be priced above what average Greeks can afford, broadening the premium segment rather than relieving affordability.

Cross-cutting investment considerations

• Energy efficiency is a risk for older stock: low energy ratings imply higher operating costs and can reduce net yields unless renovation is feasible and cost-effective.
• Legal due diligence is critical because unresolved property compliance and co-ownership complications are common in older buildings.

Government actions and IMF prescriptions

Athens is deploying a range of measures aimed at both demand and supply:

• Demand-side: subsidized mortgages for first-time buyers (MyHome), rental refunds and other support schemes
• Supply-side: renovation grants and tax incentives to bring idle units into long-term rental stock, and curbs on short-term rentals in specific zones
• Planning a national housing strategy that includes social and student housing

The IMF focuses on supply activation. Its recommendations include:

• Pair renovation incentives with penalties for long-term vacancy to bring idle units back to the market
• Assess the effectiveness of short-term rental restrictions empirically
• Reduce regulatory uncertainty in zoning and permitting to speed up construction

The IMF is candid that these measures are necessary but not guaranteed to narrow the gap quickly in Athens and Thessaloniki.

Practical strategies for market participants

For buyers and owner-occupiers

• Consider expanding your search radius. Prices in inner Attica are high; suburbs and commuter towns may offer lower price-per-square-metre and better value for families who can commute.
• Take advantage of government programs if eligible. MyHome and other subsidized loans can improve affordability metrics and reduce monthly mortgage costs.
• Factor renovation and energy upgrades into the budget. Older units often demand significant capex; insist on detailed building compliance and renovation quotes before buying.

For renters

• Negotiate renewals early and document comparable local rents. Landlords facing higher taxes or tighter STR rules may prefer long-term tenants at reasonable increases rather than losing occupancy.
• Monitor policy changes on rental subsidies and local STR restrictions that may change supply dynamics.

For investors

• Stress-test assumptions on rental growth and occupancy. Assume higher-than-average maintenance and renovation costs in older stock.
• Be cautious with STR-dependent models. Regulations tightening in tourist and inner-city zones create execution risk.
• Look at conversions and new-build pipelines where legal clarity exists, but price expectations must reflect premium positioning.

For property developers

• Expect higher construction costs and labour constraints; build contingency into timelines and budgets.
• Engage early with local planning authorities to reduce regulatory uncertainty and avoid permit delays.

Risks to watch

• Policy whiplash: sudden changes to the Golden Visa program, ENFIA or STR regulations could alter demand dynamics quickly.
• Renovation bottlenecks: bringing vacant pre-1980 units back to the market depends on funding and legal unblocking; delays will keep effective supply limited.
• Macro shocks: a downturn in tourism or foreign capital inflows would hit the premium and investor segments first and could expose leveraged borrowers.

Frequently Asked Questions

Q: Is the Greek housing market overvalued?

A: The IMF estimates a current overvaluation around 10% based on price and income metrics. Prices have outpaced disposable income growth by a wide margin since 2017.

Q: Can a median household still get a mortgage in Greece?

A: In 2024 the median household was between 7% and 17% short of the income needed to meet standard mortgage qualification tests, depending on LTV assumptions. That means many median households cannot qualify under typical lending rules.

Q: Will the Golden Visa changes fix affordability?

A: Raising the Golden Visa threshold to €800,000 in expensive zones cooled program-linked purchases, but a retained €250,000 conversion tier channels investment into premium conversions rather than affordable units. So the reform reduces some investor pressure but does not solve affordability for typical buyers.

Q: Is there a quick fix to the vacancy problem?

A: No. About 12–13% of units are vacant and many predate 1980. Renovation costs, complex co-ownership and legal compliance issues mean mobilizing those units will take policy, finance and time.

Bottom line for buyers and investors

The data show a market where capital and investor demand have pushed prices well ahead of incomes, creating an affordability crisis in major regions. If you are buying to live in Greece, expect higher down payment and qualification hurdles and plan for renovation and energy upgrades if you target older stock. If you are buying to invest, pricing, regulatory risk around STRs and the limited scope of conversion supply mean you must run conservative yield and downside scenarios.

Practical takeaway: unless renovation incentives plus legal and permitting reforms can mobilize thousands of units quickly, mortgage access and rental affordability in Attica and Central Macedonia will stay constrained for the coming years.