Bank of Greece: Apartment Rents Continue to Rise

The latest official figures by the Bank of Greece (BoG) confirm that residential rents continue to rise throughout Greece, with the northern metropolis of Thessaloniki leading the way with an average 9.1% increase year-on-year in the cost of registered residential leases in the first quarter of the year.

The figures hold more weight than similar reports by private real estate companies or sector associations, given that they were unveiled by the Bank of Greece (BoG), which compared prices in 1Q 2024 with the corresponding trimester of 2023.

The central bank reported that, on the whole, apartment rentals rose at an annual rate of 13.8% in 2023, compared to 11.9% in 2022.

Fast-forward to the second quarter of 2024 and the BoG reports that apartment rents increased on average by 10.7% year-on-year for new units (five years and under) and 8.3% for units over five years old.

Comparing the second quarter of 2024 with the corresponding period of 2023, the average increase in apartment rentals was 9.1% in Athens, 12.1% in Thessaloniki, 7.3% in other large cities, and 10.4% in the rest of the country.

The report, however, didn’t break down the figures for Athens, namely, what portion of the greater Athens-Piraeus agglomeration was taken into account, or whether the numbers affect the municipality of Athens alone.

The post-pandemic economic restart, coupled with the exponential growth of short-term leasing (the AirBnB effect) in greater Athens, Thessaloniki and a bundle of holiday destinations, as well as the highly successful “golden visa” program providing specific-term residence permits to non-EU foreign nationals buying property, has dramatically reduced available units for long-term lease.

With many urban areas already congested with previous construction, new housing cannot keep up with demand, resulting in what analysts now describe as a housing shortage in greater Athens, Thessaloniki and possibly other cities.