Crete is currently quite the focus when it comes to housing. The island is experiencing considerable pressure on the housing market – rents are rising, yet many old buildings remain empty, which is finally catching the attention of politicians and property owners.
The government now wants to push through measures that combine renovation incentives and rent caps. The aim is to get vacant flats back on the market and create affordable housing – especially in areas where demand is really high.
Europe’s housing crisis: Why Greece is at the epicentre of the crisis
Europe is facing a housing crisis of historic proportions, but in few countries is the problem as acute – and as complex – as in Greece. From rising rents and declining availability to structural weaknesses in housing policy, Greece has become a prime example of how multiple factors can combine to make housing unaffordable for ordinary citizens.
A Europe-wide problem with uneven effects
Across the European Union, housing costs have risen sharply over the past decade. According to EU data, property prices and rents have consistently outpaced wage growth, particularly in urban centres and tourist hotspots. Young people, low-income households and tenants are most affected by this imbalance.
While many countries are struggling with affordability, Greece stands out due to the severity of its challenges and the lingering effects of past crises.
Why Greece is more severely affected than most other countries
The housing crisis in Greece is not the result of a single factor, but rather the convergence of several long-term trends:
1. Post-crisis weaknesses in the housing market
The financial crisis of the 2010s severely disrupted the Greek housing sector. Construction activity collapsed, investment came to a standstill and thousands of properties fell into disrepair. Although the economy has stabilised, housing supply has not recovered at the pace needed to meet current demand.
2. Rising demand, limited supply
In recent years, demand for housing in Greece has risen sharply. Urbanisation, increasing tourism, short-term rental platforms and renewed interest from foreign investors have intensified competition, particularly in cities such as Athens and Thessaloniki and on popular islands. At the same time, new housing construction remains limited, leading to a supply shortage.
3. Pressure from short-term rentals
Short-term rental platforms have transformed entire neighbourhoods and reduced the number of flats available for long-term residents. While tourism is an important source of income for the Greek economy, it has also led to an increase in rents, making it increasingly difficult for locals to find affordable housing.
The social impact: who pays the price?
The consequences of the housing crisis are felt most acutely by younger generations. Many young Greeks are forced to live with their parents well into adulthood, while others spend a disproportionate amount of their income on rent. Low-income households are at increasing risk of housing insecurity, and homelessness is becoming an increasingly visible problem in urban areas.
This situation also has wider economic implications. When too much of household income is spent on housing, spending in other areas declines, slowing overall economic growth and deepening social inequality.
Europe’s search for solutions – and Greece’s lag
At the European level, housing affordability has gained prominence on the political agenda. Discussions are increasingly focusing on three key areas: increasing housing supply, regulating short-term rentals, and expanding social and affordable housing programmes.
However, Greece has been slower to respond in implementing comprehensive housing policy measures. Social housing remains underdeveloped compared to other EU countries, and existing support measures are often insufficient to address the scale of the problem. While recent initiatives point to a growing awareness, critics argue that there is still a lack of a coordinated, long-term strategy.
What next?
Solving the housing crisis in Greece requires decisive action on several levels. Promoting new construction, renovating the existing housing stock and striking a balance between tourism and local housing needs are essential steps. It is equally important to view housing not only as an investment good, but as a fundamental social good.
As Europe grapples with its housing shortage, Greece serves as both a warning and a test case. The decisions now being made by politicians, local authorities and European institutions will determine whether housing becomes affordable again for many and no longer remains a privilege for the few.
What are your thoughts on the housing crisis in Greece and across Europe? Share your views in the comments below.
Housing assistance: rent caps or renovation subsidies? – Landlords in Crete protest against new programme
Many landlords in Crete are quite sceptical about the planned programme. Rent caps combined with high subsidies for renovations? There are many question marks.
They fear financial losses and annoying bureaucracy. For many, the conditions for payment are simply too unclear.
- Some would like the state to cover the renovation costs in full.
- Others warn that fewer flats could be rented out if the obligations are too strict.
The government is planning a major subsidy programme to make vacant flats usable again. The aim is to bring more flats onto the rental market as quickly as possible and to expand the supply.
Owners are to receive substantial subsidies to cover the costs of renovations. The state will cover a large part of the expenses to make vacant flats habitable again.
Such measures are intended to promote long-term tenancy agreements. This creates stable housing options and gives tenants more security.
Tenants generally like the idea. Many are suffering from rising rents and a limited selection of flats.
If more flats are available, this could reduce the pressure on rental prices. The search for affordable housing may then become somewhat easier.
Landlords remain sceptical. They fear that government subsidies will be tied to many conditions.
Particularly controversial is the possible introduction of rent caps in return for subsidies. This restricts the flexibility of owners.
The owners’ association is calling for higher subsidies. They want the subsidies to cover as many costs as possible.
They reject mandatory rent caps. They want to retain freedom in their letting practices.
The programme focuses on long-term letting. Subsidised flats are to remain on the market for several years.
This provides planning security for tenants, but ties owners to contract terms. Not everyone finds this attractive.
Financing and deadlines remain sticking points. A subsidy pot is available, but exactly how the money will be distributed is still open.
Owners are paying attention to subsidy rates, rent control periods and tax consequences. Nobody wants any nasty surprises.
Expectations regarding the effect on rental prices vary. Some experts hope for relief when many flats come back onto the market.
Others warn that bottlenecks and high demand could diminish the result. Honestly, who knows for sure?
Everything depends on the participation of the owners. If they stay away, flats will remain empty.
Politicians must therefore create incentives without overburdening the owners. No easy task.
Legal and administrative details play a major role. Clear rules on selection, subsidy rates and monitoring are necessary.
Otherwise, bureaucratic hurdles will deter many. We hear this time and time again.Communication and transparency help to create acceptance. Open information about conditions, deadlines and obligations reduces mistrust.
Simpler application procedures make participation more attractive. Nobody wants to wade through piles of paperwork.
Additional incentives are being considered. In addition to grants, tax advantages or promotional loans could help.
Such instruments are particularly interesting for owners with little equity. It is worth taking a closer look.
The question of social criteria is still open. If funds are scarce, allocation could be based on social priorities.
This would primarily benefit low-income households. This increases the social benefit of the programme.
Regional differences are emerging. In cities with high demand, the measures are likely to have a faster effect.
In rural areas, the impact is often smaller. There, everything depends more on local conditions.
Control mechanisms are intended to prevent abuse. Authorities are planning checks to ensure that subsidies are used correctly.
Contractual penalties for breaches of duty could be part of this. That sounds harsh, but perhaps it is necessary.
Key performance indicators are important. These include the number of reusable flats and the development of rental prices.
This is the only way to evaluate the programme later on. Adjustments remain possible.
Pilot projects in selected regions provide initial experience. This allows rules and processes to be improved.
Stakeholder dialogues help with fine-tuning. Discussions with owners’ associations, tenants’ organisations and local authorities bring together different perspectives.
This tends to result in viable compromises. No one gets everything they want.
Various measures complement each other. In addition to renovation subsidies, new construction programmes and adjustments to tenancy law could also be implemented.
A package approach addresses more problems. This makes the whole thing more sustainable.Practical tips for interested parties:
- Owners should inform themselves early on and check the subsidy conditions.
- Cost estimates and quotes from tradespeople help with the application process.
- Carefully review contract terms and possible rent restrictions before signing.
- Tax advice is worthwhile for larger investments.
Advantages for tenants:
- More flats to choose from.
- Longer-term tenancy agreements with clear terms and conditions.
- Rents could remain more stable in affected areas.
Risks for owners:
- Longer commitment to rental agreements.
- Possible rent caps.
- Uncertainty regarding subsidy amounts and payment dates.
Political debates accompany the programme. Parties and interest groups are arguing about how much the state should intervene.
The end result should be a compromise that creates housing without scaring off owners. That is not easy.
Technical aspects of the renovations play a role. Energy efficiency, fire safety and accessibility could be among the subsidy criteria.
Such requirements often increase costs, but bring long-term benefits. Lower operating costs certainly sound appealing.
Sustainability is becoming more important. Funding requirements could specifically call for energy-saving measures.
This reduces emissions and saves tenants utility costs later on. Sounds reasonable, doesn’t it?
The timetable has not yet been finalised. Details on funding guidelines, deadlines and selection criteria will be available soon.
Owners and tenants are eagerly awaiting this information. Until then, much remains unclear.
Public perception influences success. Once the first results become visible, confidence will increase.
Quick successes in revitalising empty flats would help. Word will get around.
International examples provide clues. Other countries have tried similar programmes – sometimes with more, sometimes with less success.
There are lessons to be learned: funding rates, monitoring, communication. But every situation is different.
Long-term effects? Hard to say. If many flats are reactivated, the market may change permanently.
If participation remains low, the impact will also remain limited. The risk is always there.
The role of local authorities is central. Towns and municipalities help to find vacant properties.
They can also provide local support, for example with faster approvals or subsidies. This speeds things up.
Financial sustainability must not be neglected. The programme has a fixed budget.
Clear priorities and efficient administration make all the difference. Otherwise, a lot of money will be wasted.
The construction sector must play its part. Craftsmen and construction companies provide the services.
Good coordination prevents delays and rising costs. Unfortunately, this does not always work smoothly.
Monitoring after implementation is important. Regular evaluation shows whether the programme is working.
If necessary, adjustments can then be made. Flexibility remains essential.
Digital platforms make many things easier. Online applications, status tracking and FAQs save time and hassle.
This makes the programme more accessible. Today, that is actually a must.
The debate on rent caps remains difficult. There are no clear answers – striking a balance between tenant protection and owner interests remains a challenge.
A gradual expansion is conceivable. If the programme gets off to a good start, it can be expanded.
This allows experience to be leveraged and risks to be limited. Sounds like a pragmatic approach.
Interest in participation is likely to vary. Some landlords see opportunities, others remain sceptical.
How many participate will ultimately determine the success of the programme. Everything else is theory.
Political signals play a role. Clear commitments on financing and the legal situation are encouraging.
Uncertainty slows down investment. We see this time and time again.
The wording of rental agreements after renovation deserves attention. Standards for maintenance, ancillary costs and renovation obligations should be established.
This will help to avoid disputes later on. It is better to clarify things in advance than to argue afterwards.
In the end, it’s the cost-benefit ratio that counts. Owners calculate carefully whether the subsidy is worthwhile.
Only if it is will participation increase. Otherwise, everything will remain the same.
The social objective remains important. The programme is primarily intended to help households with little money.
Priority rules can ensure that the right people benefit. Those who are urgently looking for a flat should not be left empty-handed.
The solution lies in tax relief
Kostas Arapoglou considers rent control to be a mistake. He believes that a legal cap would deter owners.
Many would then refrain from renovating. Flats would tend to remain empty or would rarely come onto the market.
Instead, he proposes targeted tax cuts for new residential properties. Owners who rent out newly built flats on a long-term basis should pay a lower tax rate.
He cites 15% as a fair rate, for example. His aim is to make investment and renting more attractive.
He sees the advantages clearly:
- More construction projects will be created.
- Craftsmen and builders will find more jobs.
- The supply of rental properties will grow.
- More flats could ease the pressure on prices.
He believes that this measure will have a long-term effect. New buildings and additional rental properties could stabilise prices.Owners would be more willing to renovate if taxes remained fair. This would improve the quality of the flats.
Arapoglou also addresses an urban planning problem. Many plots of land remain unused because the settlement boundaries are too narrow.
This particularly affects communities with 700 to 2,000 inhabitants. New construction projects often fail because of these rules.
The result: land lies fallow, and private individuals who want to build are left empty-handed.
The disadvantages of these regulations are obvious to him:
- Plots of land are blocked.
- Demand remains unmet because no one can build.
- Communities lose investment and jobs.
- Housing supply suffers.
He is therefore calling for the rules to be relaxed. Tax incentives and more flexible land use could stimulate the housing market.
He warns that rent caps often have undesirable side effects. Owners who feel financially constrained invest less.
The condition of many rental properties could deteriorate. Renovations and modernisations would not be carried out if the return on investment is too low.
How does a lower tax work in practice? Arapoglou explains:
- Tax relief reduces running costs and increases returns.
- Higher returns encourage investment in new construction and maintenance.
- The supply of rental properties grows thanks to new and modernised flats.
- More supply leads to more competition and slows down rents.
He believes that the tax relief should be targeted. Not all rental income needs relief.
Only new buildings and long-term rentals should benefit. This keeps the goal clear and minimises abuse.
He also sees opportunities for the labour market. More construction projects mean more jobs for tradespeople, planners and suppliers.
These jobs are created locally. This strengthens the regional economy and helps the communities.
He proposes pragmatic steps for implementation:
- Lower tax rate for rental income from new buildings with long-term leases.
- Clear rules on what counts as a ‘new building’ and how long it must be leased.
- Unbureaucratic, fast administration so that owners can benefit quickly.
- Regional exceptions to relax strict settlement boundaries.
He admits that such measures could lead to tax losses. The government must weigh up whether more construction activity and higher utilisation will compensate for this.
Arapoglou believes that the effects would be positive, particularly through more construction projects and local value creation.
Political compromises are part of the process, he says, but politicians should not reflexively resort to rent caps.
Such interventions must not permanently block the market. He considers incentives that create new living space to be more sensible.
He also sees problems with rigid settlement boundaries:
- Families cannot build because there is no leeway.
- Young people can hardly find flats in their home towns.
- Tax revenues and services fall by the wayside.
He believes that politicians should look at the big picture. Short-term price suppression is not enough; in the long term, it is supply that counts.
Lower tax rates for new construction projects could achieve both: incentives and market expansion.
Transparency and clear rules are important to him. Owners need to know when they will benefit from tax relief.
The administration should make quick and reliable decisions. This is the only way to make investments plannable.
Tenants would also benefit. More flats mean more choice.
Competition between landlords could make rents more moderate. And better standards will emerge if landlords renovate more.
He points to the chain of effects: tax incentives → construction → more supply → less price pressure.
He considers this approach to be more stable than interventions that slow down the market. However, measures must be precisely tailored, otherwise there will be false incentives.
Regional differences play a role. Cities need different solutions than rural areas.
Where land lies fallow, more flexible rules are particularly helpful. This could quickly make a difference.
Simply exchanging measures is not enough, he says. Only the combination of tax cuts and land use reform will bring real progress.
He proposes further accompanying measures:
- Subsidies for energy-efficient renovation of new buildings.
- More support for small construction companies.
- Clear controls to ensure that tax advantages are linked to genuine letting.
Arapoglou remains practical. He doesn’t just want to complain, he wants solutions that really make a difference.
He is less interested in popular immediate measures. He is more concerned with increasing supply and strengthening the market.
His conclusion: tax relief and more flexible border rules will provide lasting relief for the housing market.
Clear rules and incentives can be used to encourage owners to build new homes and renovate existing ones. This increases supply and takes pressure off prices in the long term.
He calls on politicians to seriously consider these options. Less obstruction, more investment – that is his appeal.
Up to 90% subsidy to make vacant flats usable again
The minister says that many Greeks still live in their own homes. Nevertheless, around three in ten people struggle with problems accessing adequate housing.
The new measure aims to make vacant flats habitable again quickly. Owners are to receive high subsidies, in some cases up to 90% of the renovation costs.
The aim is to encourage owners to renovate unused properties and rent them out again.
Key points of the initiative:
- Target group: Owners of vacant flats, especially in cities with a housing shortage.
- Scope of funding: Renovation work, safety-related measures, energy-efficient modernisation.
- Subsidy amount: Graduated scale possible, maximum amount depends on the programme.
- Expected effect: More rental flats and relief for households with housing problems.
The minister mentioned previous housing programmes that offered rent refunds or purchase assistance. She says that single households and young people in particular have benefited from these.
She highlighted programmes that made it easier for young people to buy flats. Around 21,000 young buyers benefited – often the monthly instalment was lower than the rent for a comparable flat.
Practical details for applicants:
- Eligible applicants: Owners of vacant flats, provided certain minimum requirements are met.
- Supporting documents: Documentation of vacancy, cost estimates, possibly energy performance certificate.
- Selection criteria: urgency of repair, location, social objectives.
- Payment method: partial advance payment, remainder after completion of work.
Possible advantages for local authorities and tenants:
- More housing available in sought-after locations.
- Less neglect and vacancy.
- New options for tenants with lower incomes.
- Energy-efficient renovations reduce operating costs in the long term.
Risks and unresolved issues:
- Is there enough money to achieve a comprehensive impact?
- How quickly will owners decide to implement the programme?
- How long will the bureaucratic process for subsidies take?
- Will the modernised flats really remain affordable?
The new housing programme
The programme will start in the first five months of 2026. The budget is 400 million euros.
Owners will receive financial assistance to renovate vacant flats. The subsidy can cover up to 90% of the costs.
A maximum subsidy of €30,000 per property or €300 per square metre is available. The money will mainly be used for renovation work, including energy efficiency improvements.
The programme is open to everyone. Those who apply first have a better chance, as funding is allocated on a first-come, first-served basis.
There are also plans to raise the income limits so that more households can participate.
Key points at a glance:
- Funding amount: up to 90% of the costs
- Maximum amount: €30,000 or €300/m²
- Objective: To reopen vacant flats
- Contents: Renovations, partial energy upgrades
- Allocation: Upon receipt of applications
- Budget: €400 million
Examples of funding cases:
- An 80 m² flat can receive up to €24,000 (€300/m² × 80 m², maximum €30,000).
- Smaller flats or partial renovations are subsidised by up to 90% on a percentage basis.
Practical information for applicants:
- Early submission increases your chances.
- Cost estimates and supporting documents make the review process easier.
- Energy-efficient measures, even partial ones, can help.
- The exact income limits are available before the start.
Advantages and target groups:
- Owners of vacant flats receive financial assistance to help them re-let them.
- Households with medium or low incomes benefit from new limits.
- Regions with many vacant properties gain additional rental offers.
Brief description of the process:
- Prepare an application with a cost estimate and project description.
- Submit the application – the order matters.
- Wait for approval and find out the amount of funding.
- Renovate and provide proof of expenditure.
- Payment according to subsidy rate and supporting documents.
The programme aims to quickly activate vacant flats. It relies on financial incentives for owners and promotes renovations and, in some cases, energy efficiency improvements, without insisting on major refurbishments.
POMIDA’s position: clear rejection of rent caps
POMIDA clearly rejects statutory rent caps. The association believes that such interventions restrict the rights of private landlords and could dampen the desire to invest in housing.
For POMIDA, property protection and reliable income are the top priorities. The association’s leadership believes that no subsidy programme should force landlords to fix rents.
Programmes should function without permanent rent level requirements. Otherwise, there is concern that owners will withdraw their properties from the market or forego subsidies in order to avoid financial disadvantages.
POMIDA demands that state subsidies provide genuine compensation. If the state subsidises renovations, the support should cover a large part of the costs.
Only then will landlords accept interference in the management of their properties, according to the association. In their opinion, small subsidies are simply not enough to justify voluntary rent restrictions.
The organisation is also looking at the market situation. In sought-after regions with high returns, many landlords expect rent caps to worsen their economic situation.
That is why POMIDA considers accompanying measures such as complete cost coverage for renovations or tax incentives to be the better choice. Without such incentives, caps could cause the supply of rental apartments to shrink.
POMIDA warns of social side effects. If owners can no longer operate their properties profitably, they may decide to sell.
A major change of ownership could further reduce supply and destabilise prices and rents in the long term. POMIDA wants measures that preserve housing and protect the middle class of owners.
When it comes to specific proposals, the organisation insists on clear criteria. Support programmes should be well-funded and broadly based.
POMIDA rejects strict income or asset limits because they could exclude the middle class. From the association’s point of view, such caps are unfair and impractical, as many small landlords are not wealthy but remain dependent on rents.
Voluntary participation and flexibility are essential for POMIDA. According to the association, programmes that offer freedom of choice — for example, between renovation subsidies without rent restrictions and a more heavily subsidised option with temporary conditions — are more popular.
Flat-rate caps, on the other hand, unnecessarily restrict landlords’ scope for action. The organisation sees a real need for discussion here.
POMIDA also points to legal and bureaucratic problems. Setting and monitoring rent caps makes everything more complicated.
Inspections, complaints and disputes between tenants and landlords increase the administrative burden. This results in additional costs for both sides, according to the association.
POMIDA also sees economic disadvantages. Rent caps deter investors and slow down the renovation or construction of new flats.
The supply of housing will decline in the long term. Instead of price fixing, POMIDA prefers targeted subsidies that benefit furniture and infrastructure without blocking the market.
POMIDA calls for transparency in subsidy conditions. It wants clearly defined time frames, full cost coverage for requirements and simple, fair procedures.
Unclear rules create mistrust and lead to isolated solutions that miss the mark. POMIDA would like to see more clarity in this area.
The association also suggests alternatives. These include public investment in social housing, tax advantages for sustainable renovations and flexible subsidies that cover renovation costs without requiring permanent rent controls.
POMIDA believes that such measures will keep the housing supply stable and encourage owners to invest in their properties.
POMIDA advocates equal treatment. Regulations should not place a one-sided burden on any group of owners.
Small and medium-sized landlords must not be overburdened economically. According to the association, the middle class in particular often needs its rental income for retirement provision.
In public discourse, POMIDA emphasises the importance of dialogue. It calls on the government and legislators to involve landlords’ associations in planning.
Only by working together can solutions be found that take tenants and owners into account. Unilateral proposals without the involvement of those affected increase the risk of conflict.
- No permanent statutory rent caps.
- State subsidies must cover a significant portion of the costs.
- Programmes should be designed without strict income or asset limits.
- Voluntary participation and choice for landlords instead of coercion.
- Bureaucracy-free and transparently implemented subsidy procedures.
- Focus on incentives for renovation and new construction instead of price caps.
- Involvement of landlords’ associations in legislative planning.
POMIDA sees these demands as a way to stabilise the housing market, promote investment and respect the interests of smaller owners.
