A scheme operated by the Greek government that awards residency visas to non-EU citizens – if they stump up €250,000 (AUD 396,000) as a property investment is transforming the housing market in Athens – and not in a good way for Athenians.

Echoing the massive expansion of Airbnb in cities like Barcelona, apartments are increasingly being bought and converted into Airbnb properties, giving locals little or no chance to buy, or rent long-term.
In recent years, Athens’ property market – decimated during the crisis – has been on the rise, with house prices increasing by 3.7 per cent in 2018. With the effects of austerity still stalking the streets of the Greek capital, those best placed to invest in property are often foreigners looking to commercialise their investments rather than live in them.

A major part of the problem is the impact on the property market of the so called ‘golden visas’ scheme operated by the Greek government which allows non-EU citizens to buy residency permits if they invest in Greek property.

Aimed at increasing investment from overseas, critics say the scheme has few checks and balances, and native Greeks are losing out.

Lefteris Potamianos, president of the Athens Real Estate Association, told Neos Kosmos that the situation created by golden visa holders turning properties into short-term tourist accommodation is impossible to control.

“It affects local people and students in particular, people who are not able to find rental properties, since a large percentage of the apartments have been sold in order to be converted into AirBnb properties.”

Potamianos says unscrupulous landlords have even resorted to terminating long-term agreements with tenants in order to clear the way for Airbnb customers.

“As of now, there is no governmental directive to regulate this new trend. A committee has been appointed to set the basic layout, in order for the whole situation to be ruled and contained to lawful boundaries…drastic measures are required for the situation to be settled.”

Foreign buyers purchase properties specifically to acquire the ‘golden visa’ and then have the added benefit of gaining income through Airbnb.

While Greece lags behind in managing its golden visa scheme, Cyprus has taken a lead, with its government ruling that all applicants must have a Schengen visa and undergo thorough background checks before applying.

The Cyprus government has vowed to ensure that a proportion of the funds obtained through naturalisation of foreign investors will be used to create affordable homes for Cypriots.

Perth-born Nick Geronimos, founder of Athens Backpackers and Studios in Koukaki set up his Athens business after moving to Greece in 2004. He has long warned of the impact of Airbnb on the housing market and licenced tourist accommodation operators.

“It is now near impossible to rent in central Athens”, Geronimos told Neos Kosmos.

“Most apartments are now advertised as short-term tourist accommodation, and many tenants have been forced from their rentals at the end of their lease, with landlords refusing to renew so they can convert to AirBnB.”

“The knock-on affect is that rents have skyrocketed. Long-term tenants can no longer afford to be in central Athens.”

While many EU countries including have golden visa schemes, Greece appears to have the easiest financial terms for applicants, with investors being awarded a five-year residency visa if they purchase a property to the value of €250,000 or more.

Enterprise Greece – the Greek government’s the investment and trade arm – reportedly awarded 9,756 residence permits to foreign investors in 2018 (up to the end of November). This is up from 6,205 in 2017, and 3,695 in 2016. Chinese, Russian and Turkish have been the most common nationalities awarded visas.

More than half of Greece’s properties leased short-term on platforms such as Airbnb are run by management companies, the majority of which are in Athens, according to a recent report detailing Greek property trends in 2018.

The market for property management services, (check-in, cleaning, check-out, marketing and promotion) has boomed in recent years, driven by the constantly expanding ‘home-sharing’ trend in Greece.

Additional sources: BBC/GTP