Greece Faces an Intensifying Housing Crisis as the Rapid Rise of Short-Term Rentals Displaces Locals and Strains the Real Estate Market

Published on December 27, 2025

Greece, a nation known for its ancient ruins, idyllic islands, and thriving tourism sector, is now facing a pressing challenge that threatens both its local housing market and the very essence of its communities. The rapid surge in short-term rentals, driven by platforms like Airbnb, is shaking up the accommodation industry in the country, pushing affordable housing out of reach for many locals, and raising concerns about the long-term sustainability of Greece’s urban and rural areas.

Tourism, the backbone of Greece’s economy, has flourished for decades, drawing millions of visitors each year to its historical landmarks, pristine beaches, and charming villages. But as tourism booms, a parallel shift is occurring in the housing market. New data from the Institute of the Greek Tourism Confederation (INSETE) shows that short-term rental properties in Greece reached a record high of 245,944 listings in July 2023. With these properties offering a capacity of over one million beds, the number of available rentals for tourists now significantly exceeds the total number of hotel rooms in the country—approximately 900,000.

This rapid growth in short-term rentals is having a profound impact on Greece’s traditional accommodation industry, as well as on the availability of long-term housing. What was once a vibrant market of properties available for residents is increasingly being converted into short-term tourist accommodations. The trend is most prominent in popular tourist destinations such as Athens, Mykonos, Santorini, and Crete, where property owners can earn much higher returns from short-term rentals than from leasing properties for the long term. As a result, local residents are finding fewer affordable rental options, and property prices have skyrocketed.

For Greek citizens, this transformation has led to mounting concerns about their ability to find and afford a place to live. Local tenants, particularly in major cities and high-demand tourist areas, are increasingly competing with international tourists for a shrinking pool of rental properties. The result is a significant rise in rents, which is becoming unsustainable for many families and young people. In some areas, the housing market is so strained that locals are being forced to move further out of urban centers in search of affordable homes, and some are even leaving their communities entirely.

The pressure on the housing market is particularly tough for Greece’s younger population. With high youth unemployment rates and limited job opportunities, young Greeks are already struggling to make ends meet. As long-term rental properties become scarcer and more expensive, homeownership becomes increasingly out of reach for many. The dream of settling down in one’s own community is becoming a distant aspiration for an entire generation.

Moreover, the rise in short-term rentals is reshaping entire neighborhoods, with local culture and identity at risk of being replaced by transient tourist populations. Areas that were once home to families and small businesses are now dominated by vacation rentals. The impact of this shift goes beyond housing: it affects the social fabric of communities, with many residents lamenting the loss of a sense of belonging and cohesion. As the number of short-term tourists grows, local businesses that cater to residents—such as grocers, pharmacies, and schools—are losing customers, and the daily rhythm of neighborhoods is changing.

This situation is not unique to Greece. Across the Mediterranean, countries like Spain are facing similar challenges. In cities like Barcelona, where short-term rental platforms have flourished, locals have raised concerns about gentrification, rising rents, and the loss of cultural identity. In some regions, there are calls for stricter regulations on short-term rentals to prevent further damage to the housing market and local communities.

In Greece, calls for regulation are growing louder. Some experts suggest that a balance must be struck between supporting the tourism industry—an essential economic driver—and protecting the housing needs of local populations. Proposals include limiting the number of days a property can be rented out short-term, imposing taxes on short-term rental income, and restricting the number of properties that can be converted into vacation rentals in high-demand areas.

However, implementing these changes is no simple task. The tourism industry has proven to be resilient and lucrative, and many property owners rely on short-term rentals to support their livelihoods. Striking a balance between these economic interests and the need for affordable housing will require a multifaceted approach, one that considers the needs of residents, businesses, and tourists alike. Additionally, Greece’s economy is highly dependent on tourism, and any measures to restrict short-term rentals may have unintended economic consequences.

Looking forward, Greece faces a crucial challenge: how to manage the intersection of tourism and housing. As the short-term rental industry continues to expand, local governments will need to consider the long-term effects of this trend on their communities. The solutions to this housing crisis will not only shape the future of the tourism sector but will also determine the resilience and sustainability of Greek cities and villages.

This issue is emblematic of a broader problem facing many European countries with thriving tourism industries. As platforms like Airbnb continue to grow, the question of how to regulate short-term rentals in a way that preserves local housing markets will remain a central concern. For Greece, the resolution of this issue will likely have lasting implications for its economy, its communities, and its cultural identity.