Rent costs soar in Athens, show double-digit growth

Signs of the housing rental market overheating in central Athens are growing as rents show double-digit growth, while selling prices advance at an even faster pace, exceeding 1,500 euros per square meter, according to data from spitogatos.gr.

The figures reflect strong growth on short term rental platforms, such as Airbnb, and rising demand for homes in the heart of the city, mainly from foreign buyers. The data collected by spitogatos.gr track rents and selling prices in the 12 months leading up to June. 

The cost of renting an apartment in the center of Athens jumped by 10.2 percent while selling prices increased by 31 percent. The average sales price reached 1,522 euros per square meter, versus 1,162 euros a year earlier. The price index put together by spitogatos.gr shows that the average price of rent in Greece gained 9.4 percent while selling prices climbed 7.2 percent.

Apart from demand from short term rental platforms, limited construction activity amidst tight mortgage lending conditions from banks also contributed to the price hikes.

Market sources say that rising prices led to a drop in sales transactions, particularly in the third quarter of the year. One such area where this took place in the Athens suburb of Kallithea, where prices have risen sharply but the number of deals being conducted in the area has dropped.

The highest increase in rents was seen in areas hardest hit by the crisis or popular with university students, according to spitogatos.gr.

In the second quarter of the year, rents in Piraeus showed the biggest annual rise, jumping 20.1 percent. Large increases were also seen in the western suburbs (15.4 percent) and the northern suburbs (11.5 percent).

In northern Greece's Thessaloniki, rents rose in regional municipalities by up to 13 percent. At a national level, the largest rise in rents was in Rethymno, Crete (31.7 percent) followed by the state of Pieria (26.7 percent).

In Piraeus, there was also a sharp increase in sales prices over more than 18 percent. In central Thessaloniki, housing prices leaped by 25 percent. Apart from Athens and Thessaloniki, gains in selling prices were more moderate across Greece, showing even drops in some parts of the country.