Greece’s housing crisis has become one of the most complex and persistent challenges facing the country’s economy, placing sustained pressure on households despite the gradual easing of inflation.

While price growth has slowed, rents in particular and housing costs in general remain stubbornly high, eroding disposable incomes and making both renting and homeownership increasingly difficult. For middle-income households, housing has emerged as a primary source of financial strain, a reality now reflected in opinion polls that rank it among Greece’s most pressing social issues.

Against this backdrop, the government is preparing to announce a significant shift in housing policy. At a Cabinet meeting earlier today, Minister of Economy and Finance Kyriakos Pierrakakis and Minister of Social Cohesion and Family Affairs Domna Michailidou presented a new package of legislative initiatives aimed squarely at the supply side of the housing market.

From demand subsidies to boosting supply

The new approach marks a clear departure from policies focused on subsidizing demand. Instead, the government is prioritizing measures designed to increase the supply of housing, particularly homes available for long-term rental.

At the center of the plan is a new framework of incentives for construction companies and private investors to build or convert properties that will be used exclusively for long-term leases. Projects under the scheme will be subject to a minimum commitment period of 10 years, with provisions for tax deductions on rental income and centrally set caps on maximum rent levels.

The aim is to create a new stock of affordable rental housing and gradually influence the structure of the market. However, the measures are primarily geared toward large developers and institutional investors, meaning small-scale builders are likely to be excluded, at least in the initial phase.

The government acknowledges that Greece’s housing problem is rooted less in demand and more in a chronic shortage of supply. For years, construction activity was largely directed toward high-end properties for sale or short-term rentals, leaving a gap in affordable housing options. The new incentives are intended to redirect investment toward long-term leasing and reverse that trend.

Social housing through public land

Another key pillar of the strategy is the expansion of a social housing model of “public land-for-flats” schemes, a public-private partnership designed to increase housing supply without direct public spending.

Under the scheme, private developers use their own funds to build or renovate underutilized state-owned buildings and plots that have long remained idle. In return, at least 30% of the newly created apartments are transferred to the state and made available at below-market rents to young people, families and vulnerable households.The remaining units are released onto the private market for sale, further increasing overall housing supply and strengthening Greece’s residential stock.

According to information cited by OT.gr, a joint ministerial decision is expected shortly to activate the framework for the first 10 state-owned properties that have already completed technical and legal preparations. The first tender under this social housing model is expected in 2026, marking its first large-scale test in practice.

Major renovation program

The package also includes an extensive home renovation program with subsidies covering up to 90% of renovation costs. With a total budget of 400 million euros, grants can reach up to 36,000 euros per home, targeting old, abandoned or vacant properties and bringing them back into the long-term rental market.

In parallel, the government plans to offer the annual reimbursement of two months’ rent to around 50,000 teachers, nurses and doctors working outside the Athens region (Attica) and Thessaloniki. The measure is designed to encourage professionals to remain in areas facing acute housing shortages.

Tighter rules on short-term rentals

Short-term rentals are also under scrutiny. Existing restrictions on platforms such as Airbnb will be strengthened, with regulations extended to central Thessaloniki. In designated zones where short-term rentals are banned, properties that change ownership will be automatically removed from the national short-term rental registry, preventing a return to the same use.

What remains unclear is whether the incentives on offer will be sufficient to offset rising construction costs and the long-term capital commitments required from investors.