With low rents now a thing of the past and property prices skyrocketing, the housing crisis has become one of the most painful issues for Greek society. Especially in island destinations, such as Kefalonia, tourist pressures further exacerbate the problem, removing even the slightest opportunities from local residents. The scene is shaped by the rapid increase in prices, limited supply, and the turn of many owners to short-term rentals, a fact that forces many residents to anxiously search for months to find decent housing. The research conducted and the testimonies of real estate professionals in Kefalonia to kefalonianglobe.com reveal a complex and interdependent ecosystem that requires immediate and drastic initiatives.
Challenges in the real estate market with data - Measures taken on an international scale
According to research by RE/MAX Greece, rent prices increased by 5.6% across the country in 2024 compared to 2023. This increase reflects the general demand that continues to dominate, while supply remains limited due to many owners turning to short-term rentals. At the same time, Eurostat's data shows that demand for short-term rentals increased by 66% between 2018 and 2023, highlighting the scale of the phenomenon.
As a result, residents are unable to find housing, and even if they do, the rental cost is exorbitant. A typical example is the recent survey by the Panhellenic Network E-Real Estates (2024) which shows that in the center of Athens, only 6.4% of available properties for rent, suitable for a family (80-100 sq.m. with two bedrooms, above the 1st floor) are rented for up to 600 euros.
Of course, this situation does not only prevail in Greece, but is a housing crisis that concerns many other countries both in Europe and in America. In Barcelona, for example, the local government decided that it would no longer renew licenses for short-term rental properties and would also not grant new ones. Barcelona currently has more than 10,000 short-term rental apartments, but when the last licenses expire in November 2028, it will have none. According to public statements by the mayor, Jaume Collboni, rent in Barcelona has increased by approximately 68% in the last 10 years, while the purchase price of a property has increased by 38%. Similar restrictive measures on short-term rentals have also been taken in New York, while Paris, Amsterdam, Berlin, Lisbon and other popular tourist destinations also impose harsh restrictions on Airbnb rentals.
At the same time, the Irish government is trying to address the crisis by investing in social housing and rental subsidies, while providing tax incentives for new buyers, as Valencia, Budapest and Athens are enacting new legislation to combat overtourism and illegal short-term accommodation, Euronews writes.
In Kefalonia, the issue of the housing crisis is strongly linked to the island's tourist character. The continuous demand from tourists has increased short-term rentals, significantly limiting the availability of long-term housing for locals. At the same time, high sales and rental prices make it difficult to acquire or lease homes, even for middle incomes. The island faces unique challenges, as the supply of properties does not keep pace with demand, while the needs of residents often come second to tourist activities.
What Real Estate professionals say about Kefalonia
Evangelos Mantas, Urban Real Estate Agent (Mantas Real Estate)
"The buying trend is increasing and continues to increase every year. There is greater demand and less supply, as properties sold are not replaced by new ones. As for property prices, they are increasing on the one hand due to demand, and on the other hand due to the high construction costs, which are dragging the market along," explains Mr. Mantas.
There is no balance between supply and demand as "properties are not replaced, because the rate of house sales is faster than the rate of construction. Although new properties are being built, most are intended for tourist exploitation. In fact, the areas with the highest demand are around Lourda beach, Trapezaki, Livathos, Fiscardo, Agia Efimia and Skala," he adds.
A positive element brought about by construction in combination with the tourism factor on the island is that "the constructions are of good quality". Those who rent properties for tourist use build beautiful homes in excellent locations, with very good materials and with the help of professionals. This contributes to the overall good image of the market and to attracting investors, raising the level on the island every year. That is, as Mr. Mantas explains, "having beautiful homes, beautiful tourist accommodations in beautiful spots on the island, even the visitor who comes to invest or the tourist who wants to come and buy in Kefalonia to spend the rest of his life is carried away by seeing such a picture with the houses and he also builds something very beautiful, as a result of which the level of construction and generally of accommodation and services on the island increases every year."
It is worth mentioning that high property prices attract people with greater financial capacity, mainly foreigners. At the same time, locals, especially in Argostoli, prefer apartments in the city because they serve their daily needs.
It is curious that "urban properties intended for rent do not often receive the care they should, while property renovations focus on properties intended for tourist exploitation," according to him. In fact, "the government has identified this problem and offers incentives, such as tax breaks, so that owners renovate their properties. Nevertheless, many owners do not proceed with renovations, either due to lack of interest or because many properties have many co-owners," explains Mr. Mantas. At the same time, he states that "due to the high construction costs, the owners themselves do not have the earnings they should have for the property they give to the tenant."
Talking about the future and whether it is possible to change the image of the real estate market, Mr. Mantas states that "it is very difficult to predict when the next crisis will come and when prices will start to fall. Property prices rise easily, like the kilos we gain on our bodies, but they are difficult to reduce. In addition, Greece is currently in a phase of development in the real estate sector."
Gerasimos Mantas, Owner of GM Properties & Developments
For his part, Mr. Gerasimos Mantas gives his own perspective and agrees that prices are on an upward trend in the real estate sector. "The current trend has been increasing for the last two years, and there are many factors, such as inflation, rising construction materials and the expiry of the Golden Visa deadline. Prices have increased by at least 35%, both in renting and buying," says Mr. Gerasimos Mantas.
"The greatest demand is found in the Livathos area and up to Skala, mainly due to the coastline, the beautiful beaches, the sea view and the south orientation.
Unfortunately, the locals' dynamic in the buying market is limited, while in the rental market there is a great demand from locals for housing, but there are not enough offers. There is a very large shortage of rental properties, because they are not built at the same rate as the demand requires. And those who build, do so with the aim of selling, with the result that those looking to rent cannot find anything. In addition, most residents gather in Argostoli and want to stay there, with the result that Argostoli is in a stalemate," he further explains.
Regarding the issue of short-term rentals and how they affect property availability, Mr. Mantas states that "many choose to make their properties available through short-term rental applications, as the return is at least double."
Neither Mr. Gerasimos Mantas is optimistic about the future. "The situation will remain as it is. Finding housing will continue to be difficult, prices will not increase further, and I don't believe anything significant will change. My personal opinion is that the island is not suitable for investment accommodations, but only for tourist exploitation, and this is only valuable in cases where the buyer himself manages the business," he notes.
Angeliki Dionysatou, Administrator of "D Properties Kefalonia" office
Finally, Ms. Angeliki Dionysatou, who spoke to kefalonianglobe.com, presented her own picture, stating that the increase in property prices has been significant in the last 5 years. "Already the price per square meter has reached 2,500 – 3,000 euros in Kefalonia, from 1,500 – 1,800 euros in 2019, and of course this varies depending on the area. Argostoli certainly has the highest prices, while the areas of Erisos, Fiskardo and Livathos remain equally expensive all year round. The more affordable properties, on the other hand, are located in Lixouri, throughout the Paliki area, and in Poros," states Ms. Dionysatou.
Most property buyers in Kefalonia, whether it's land or a house, are foreigners who want to invest. Unfortunately, Greeks have disappeared from the buying landscape in the last two to three years. "In the past, we had British, German, Swedish, Norwegian investors. Now the British have remained, but their number has decreased, while there is also demand from Israelis," she adds. Subsequently, answering the question, "how can the increase in property sales in Kefalonia be explained," Ms. Dionysatou estimates that teleworking is a reason that has contributed significantly in recent years. "After the coronavirus, teleworking has increased, so many people want to live on an island or in the countryside and work remotely. Therefore, they choose Kefalonia, which is a green, beautiful island and lacks nothing," she characteristically says.
This situation, as we saw earlier, affects not only property sales but also rentals. "Unfortunately, rent has also increased significantly. That is, for an 80sqm property in Argostoli with 2 or 3 bedrooms, the price ranges from 600 to 1200 euros per month," emphasizes Ms. Dionysatou.
Of course, she also wanted to comment on the burning issue of short-term rentals, highlighting it as a major reason that has affected the supply of properties and, by extension, rental prices. "The truth is that there are houses in Kefalonia, it's just that in the last 10 years there have been many sales and purchases for investment purposes, such as Airbnb. This has resulted in high demand and minimal supply of houses. And due to short-term rentals, there are many houses that are closed, meaning they are available for rent from October to June, because for the rest of the year they operate as tourist accommodations."
At the same time, she also raises the issue of the condition of properties offered for rent, stating characteristically that "the real challenge is to find a newly built or renovated house, without humidity and with an elevator and heating." In fact, Ms. Dionysatou shares a similar view with Mr. Evangelos Mantas, stating that property owners, even if they want to rent or sell at a high price, "do not show any intention of maintaining their properties."
Conclusions
The housing crisis in Kefalonia is a complex problem affecting both residents and investors. The increasing demand for properties, coupled with the shift towards short-term rentals, limits the availability of long-term housing. At the same time, high prices and construction costs exacerbate the situation, making housing difficult for middle and lower-income strata.
At the European level, the EU recognizes the seriousness of the housing crisis and has decided to establish a special committee called the "Special Committee on the Housing Crisis in the European Union" to address the problem. This committee will, in cooperation and consultation with the competent permanent committees, undertake responsibilities, including the analysis of issues and the monitoring of European legislation concerning short-term rentals.
This initiative, combined with the adoption of targeted policies, represents a significant step towards finding solutions.