Housing affordability in Greece has become more than a social issue—it is now a macro-economic constraint. Rising rents in Athens and other urban centres are outpacing wages, threatening household budgets, labour mobility, and the broader recovery (Reuters, 2026). At the same time, foreign demand—driven largely by the Golden Visa programme—has intensified competition for existing properties.
In contrast, Australia has adopted a coordinated approach, restricting foreign purchases of established dwellings while encouraging investment in new construction, illustrating how carefully aligned policy levers can protect affordability without discouraging productive capital. Understanding these differences offers critical lessons for Greece as it seeks to manage foreign demand, expand supply, and reform housing policy effectively.
Golden Visas: Investment or Speculation?
Greece’s Golden Visa programme has been a major driver of foreign property demand. Until recently, investors could qualify for residency by purchasing property worth €250,000 (or €500,000 in high-demand zones). Reforms in 2024–25 raised thresholds to €800,000 in high-pressure areas and introduced minimum property sizes, alongside short-term rental restrictions.
Yet demand remains strong. Between January and July 2025, Greece issued 17,254 Golden Visas, a 31% increase from the start of the year, largely to buyers from Turkey, China, and Israel (To Vima, 2025). Much of this investment flows into existing properties, which do not add new supply but instead drive up prices and rents.
From a policy and economic standpoint, this distinction is crucial. While such purchases appear as capital inflows in official statistics, they differ from productive foreign direct investment, which expands housing, creates jobs, and adds economic capacity. In contrast, buying existing dwellings is primarily a demand shock, inflating prices without increasing stock (ATO).
Second-Best Implications
Greece’s piecemeal interventions illustrate the Theory of the Second Best (Lipsey & Lancaster, 1956). By targeting only certain distortions—Golden Visa thresholds, short-term rentals, or regional limits—without addressing the broader supply bottleneck or interdependent market pressures, reforms may fail to improve overall welfare and can even redirect scarcity elsewhere. Raising the Golden Visa threshold may curb some speculative demand, but rents remain high if supply stays inelastic or if non-discretionary pressures, like tourism and migration, continue to grow (Reuters, 2026; To Vima, 2025).
By contrast, Australia’s policy framework demonstrates a more coordinated approach. From April 2025 to March 2027, foreign persons are banned from purchasing existing dwellings, while investment in new buildings or vacant land remains permitted. Speculative demand is limited, supply is expanded, and multiple policy levers act in concert to mitigate distortions (ATO).
Golden Visa schemes privilege access based on financial capacity, concentrating demand in high-demand zones and exacerbating inequality. Australia’s separation of property ownership and immigration rights illustrates how market stability and migration objectives can coexist. While Australia encourages capital inflows that expand supply, Greece has often conflated investment incentives with residency, producing unintended distortions.
Learning Through the Diaspora
Another lesson lies in how policy knowledge is mobilised. Australia hosts a large, professionally embedded Greek diaspora that represents a form of diaspora direct investment in institutional expertise, particularly in housing policy, urban planning, and taxation. Comparable economies—including Ireland, Israel, India, and several East Asian countries—have treated their diasporas not merely as political constituencies or sources of remittances, but as channels for importing regulatory experience, administrative capacity, and policy know-how into domestic institutions.
This approach is well documented in the migration and development literature, which shows that diasporas contribute not only capital flows, but also skills, technology transfer, and institutional capacity building (academic studies on diaspora knowledge networks). In Greece, engagement has tended to focus on symbolic measures, such as postal voting for overseas citizens (To Vima), rather than structured mechanisms for technical exchange. Embedding diaspora expertise into formal advisory forums would allow this knowledge capital to complement domestic reform in a sustained and evidence-based way.
Policy Takeaways
Distinguish capital flows: Encourage investment that adds supply; restrict speculative inflows into existing stock.
Align immigration and housing policy: Avoid tying residency or citizenship to property acquisition.
Institutionalise learning: Engage the diaspora and international expertise through structured mechanisms.
Address structural bottlenecks: Without increasing supply, partial reforms will struggle to improve affordability (second-best problem).
Behavioral economics underscores that predictable, transparent rules shape expectations, while public choice theory emphasizes the need to align political incentives with long-term social welfare rather than short-term optics. Greece’s experience shows that good intentions are insufficient: without coherent, coordinated policy, housing affordability pressures will persist, despite repeated reforms.
Conclusion
Greece has the knowledge and resources to learn from international experience, but the challenge lies in coordinating policy levers, distinguishing adjustable from unavoidable pressures, and embedding expertise beyond symbolism. International assessments show that Greece lags peers on key indicators of government effectiveness, regulatory quality, and economic literacy, underscoring the need to strengthen institutional capacity alongside housing reform (OECD, Government at a Glance 2025: Greece; OECD Economic Surveys: Greece). Unless housing policy is anchored more firmly in economic principles, market mechanics, and structural realities, affordability pressures will continue to outpace policy efforts, constraining both economic recovery and social well-being.
