As affordable rentals become a thing of the past and property prices skyrocket, the housing crisis has emerged as one of the most pressing issues for Greek society. In island destinations like Kefalonia, the pressures of tourism exacerbate the problem, leaving locals with even fewer opportunities. The situation is shaped by the rapid increase in prices, limited supply, and the shift of many property owners to short-term rentals, forcing residents to search desperately for months to find decent housing. Studies and testimonials from real estate professionals in Kefalonia, as reported on kefalonianglobe.com , reveal a complex and interdependent ecosystem that demands immediate and drastic action.
Challenges in the Real Estate Market – Measures Taken Globally
According to a study by RE/MAX Greece, rental prices increased by 5.6% nationwide in 2024 compared to 2023. This rise reflects ongoing demand, while supply remains constrained due to many property owners shifting to short-term rentals. Meanwhile, Eurostat data indicates that the demand for short-term rentals rose by 66% between 2018 and 2023, highlighting the scale of the phenomenon.
As a result, residents struggle to find housing, and even if they do, rental costs are exorbitant. A recent study by the Nationwide Network of E-Real Estates (2024) shows that in central Athens, only 6.4% of available rental properties suitable for families (80-100 sq.m., two bedrooms, above the first floor) are rented for up to €600.
Of course, this issue is not exclusive to Greece but represents a housing crisis affecting many countries across Europe and America . In Barcelona, for example, the local government has decided not to renew licenses for short-term rentals and will not issue new ones. Barcelona currently has more than 10,000 short-term rental apartments, but when the remaining licenses expire in November 2028, there will be none left. According to public statements by Mayor Jaume Collboni, rent in Barcelona increased by approximately 68% over the last ten years, while property purchase prices rose by 38%. Similar restrictive measures on short-term rentals have been implemented in New York, Paris, Amsterdam, Berlin, Lisbon, and other popular tourist destinations.
Meanwhile, the Irish government is tackling the crisis by investing in social housing and rent subsidies while providing tax incentives for new buyers. Valencia, Budapest, and Athens are enacting new legislation to address overtourism and illegal short-term stays, as reported by Euronews.
In Kefalonia, the housing crisis is closely tied to the island’s tourist nature. Constant demand from tourists has increased short-term rentals, significantly reducing the availability of long-term housing for locals. At the same time, high sales and rental prices make acquiring or renting homes difficult, even for middle-income families. The island faces unique challenges, as the property supply fails to meet demand, while residents’ needs often take a back seat to tourism activities.
What Real Estate Professionals Say About Kefalonia
Evangelos Mantas, Urban Property Agent (Mantas Real Estate)
“The purchasing trend is upward and continues to rise each year. There is greater demand and less supply, as properties sold are not replaced with new ones. Property prices are increasing both due to demand and the high cost of construction, which affects the market,” Mr. Mantas explains.
“There is no balance between demand and supply because properties are not replaced. The sales rate of residences is faster than the construction rate. Although new properties are being built, most are intended for tourism purposes. Areas with the highest demand include Lourdas Beach, Trapezaki, Livathos, Fiskardo, Agia Effimia, and Skala,” he adds.
A positive aspect of construction combined with the tourism factor on the island is that “the constructions are of good quality.” Those renting properties for tourism purposes build attractive residences in exceptional locations, using high-quality materials and with the help of professionals. This contributes to the overall positive image of the market and attracts investors, raising the standard of the island each year. As Mr. Mantas explains, “Having beautiful residences, stunning tourist accommodations in prime locations on the island even inspires visitors—whether they come to invest or simply to buy a property to spend the rest of their life in Kefalonia. They are influenced by this image of quality homes and often choose to build something equally beautiful, which results in an annual improvement in the level of construction, accommodation, and services on the island.”
It is worth noting that high property prices attract people with greater financial means, primarily foreigners. At the same time, locals, especially in Argostoli, mainly prefer apartments within the city because they meet their daily needs.
Interestingly, “urban properties intended for rental often do not receive the care they deserve, while renovations focus on properties meant for tourism use,” according to Mr. Mantas. Moreover, “the government has identified this issue and offers incentives, such as tax breaks, to encourage property owners to renovate their properties. However, many owners do not proceed with renovations, either due to a lack of interest or because many properties have multiple co-owners,” he explains. Additionally, he mentions that “due to the high cost of construction, property owners themselves do not receive the returns they should for the assets they rent out.”
Speaking about the future and whether it is feasible to change the real estate market’s outlook, Mr. Mantas states that “it is very difficult to predict when the next crisis will occur or when prices will start to drop. Property prices rise easily, like gaining weight on your body, but they decrease with difficulty. Moreover, Greece is currently in a growth phase in the real estate sector.”
Gerasimos Mantas, Owner of GM Properties & Developments
From his perspective, Mr. Gerasimos Mantas provides his insights and concurs that prices are on an upward trajectory in the real estate sector. "The current trend has been upward over the past two years, with various factors contributing to this, such as inflation, the rise in construction material prices, and the expiration of the Golden Visa deadline. Prices have increased by at least 35%, both in rentals and sales," states Mr. Gerasimos Mantas.
"The highest demand is found in the Livathos area and extends to Skala, primarily due to the coastline, beautiful beaches, sea views, and southern orientation.
Unfortunately, the purchasing power of locals in the market is limited, while in the rental sector, there is significant demand from locals for housing, but there are not enough offers. There is a severe shortage of rental properties because construction is not keeping pace with demand. Those who build often do so with the intent to sell, leaving those seeking rentals unable to find suitable housing. Furthermore, most residents are concentrated in Argostoli and prefer to stay there, leading to stagnation in the area," he further explains.
Regarding short-term rentals and their impact on property availability, Mr. Mantas remarks, "Many choose to list their properties on short-term rental platforms because the returns are at least double."
Mr. Gerasimos Mantas does not appear optimistic about the future. "The situation will remain as it is. Finding housing will continue to be challenging, prices will not rise further, and I do not believe anything significant will change. In my opinion, the island is not suitable for investment properties, except for tourism exploitation, which only has value when the buyer manages the business themselves," he notes.
Angeliki Dionysatou, Administrator of "D Properties Kefalonia"
Finally, Ms. Angeliki Dionysatou, speaking to kefalonianglobe.com, shared her perspective, stating that the increase in property prices has been significant over the past five years. "Currently, the price per square meter has reached €2,500–€3,000 in Kefalonia, up from €1,500–€1,800 in 2019, and, of course, this varies depending on the area. Argostoli undoubtedly has the highest prices, while the regions of Erisos, Fiskardo, and Livathos remain equally expensive throughout the year. On the other hand, the most affordable properties are found in Lixouri, the entire Paliki region, and Poros," says Ms. Dionysatou.
Most property buyers in Kefalonia, whether for land or housing, are foreigners looking to invest. Unfortunately, Greeks have largely disappeared from the market over the past two to three years. "Previously, we had English, German, Swedish, and Norwegian investors. Now, only the English remain, albeit in smaller numbers, while there is growing demand from Israeli buyers," she adds. Responding to the question, "What could explain the increase in property sales in Kefalonia?" Ms. Dionysatou suggests that remote work has played a significant role in recent years. "After COVID-19, remote work has increased, so many people want to live on an island or in the countryside and work remotely. Consequently, they choose Kefalonia, which is a green, beautiful island that lacks nothing," she explains.
This situation, as discussed earlier, affects not only property sales but also rentals. "Unfortunately, rental prices have risen significantly as well. For instance, an 80-square-meter property in Argostoli with two or three bedrooms costs between €600 and €1,200 per month," Ms. Dionysatou highlights.
On the pressing issue of short-term rentals, she also shared her thoughts, emphasizing its significant impact on the availability of properties and, by extension, on rental prices. "The truth is that there are houses in Kefalonia, but over the last 10 years, many have been purchased for investment purposes, such as Airbnb. This has resulted in high demand and limited supply of homes. Additionally, due to short-term rentals, many houses remain closed, meaning they are rented out from October to June but operate as tourist accommodations for the rest of the year."
She also addressed the condition of rental properties, stating, "The real challenge is finding a newly built or renovated home without damp issues and equipped with an elevator and heating." Reflecting a similar view to Mr. Evangelos Mantas, Ms. Dionysatou noted that while property owners aim to rent or sell their properties at high prices, they show little willingness to maintain or upgrade them.
Conclusions
The housing crisis in Kefalonia is a complex issue affecting both residents and investors. The growing demand for properties, combined with the shift towards short-term rentals, limits the availability of housing for long-term use. At the same time, high prices and construction costs exacerbate the situation, making housing inaccessible for middle- and lower-income groups.
At a European level, the EU recognizes the severity of the housing crisis and has decided to establish a special committee named the "Special Committee on the Housing Crisis in the European Union" to address the issue. This committee will take on responsibilities, in collaboration and consultation with the relevant permanent committees, including the analysis of issues and the monitoring of European legislation regarding short-term rentals.
This initiative, combined with the adoption of targeted policies, represents an important step toward finding solutions.
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