When homes become assets: Europe’s new housing economy and the Greek paradox

Between 2004 and 2024, the EU emerged as a major hub for institutional investment in residential real estate. The value of residential assets held by EU-listed residential funds increased from EUR 4.8 billion to EUR 198.7 billion, raising the EU’s share of global listed residential assets from 19% to 28%.

The sector’s business model has increasingly shifted toward capital appreciation rather than rental income, reflecting Type 3 speculation. Over the same period, property values of EU-listed residential funds grew 42-fold, while rental income increased only 19-fold, indicating growing dependence on valuation gains. This trend is further reflected in the asset-intensity ratio, which rose from 5.1 to 11.1, meaning listed funds now hold more than EUR 11 in housing assets for every EUR 1 of annual rental income.

Listed residential landlords have also become more integrated into financial markets through equity and debt financing, with balance sheet management playing a central role in investment strategies. The rise in interest rates since 2022 has exposed the vulnerabilities of this model, contributing to declining asset valuations and deleveraging. Unlisted residential real estate funds exhibit similar, and in some cases stronger, speculative characteristics, with an asset-intensity ratio of 17.0 in 2024, suggesting an even greater reliance on capital gains.

The case of Greece

According to the report, the particular characteristics of the Greek housing system—including its exceptionally high rates of owner-occupation, the predominance of non-mortgaged homeownership, and the fragmented nature of residential property ownership—have significantly constrained the large-scale penetration of institutional investors into the mainstream housing market. These structural features have acted as a degree of protection against the extensive portfolio acquisitions that have transformed housing markets in countries such as Germany, Spain and Ireland.

The report further highlights that Greece possesses a comparatively underdeveloped mortgage market. Although mortgage lending expanded substantially during the 2000s, particularly before the sovereign debt crisis, mortgage penetration remains lower than in many other European Union Member States. At the same time, Greece introduced legislation governing Real Estate Investment Trusts (REITs) in 1999, with subsequent legislative updates in 2025. The report notes that the Greek equivalent, the Real Estate Investment Company (REIC), represents a relatively modest market, with total capitalisation amounting to approximately 1.38% of national GDP. Consequently, despite the existence of an institutional investment framework, listed real estate companies have not established a significant presence in the residential housing sector.

Unlike other countries that created dedicated “bad banks” to absorb distressed assets after the global financial and sovereign debt crises, Greece followed a different path. The report explains that institutional investors entered the Greek market primarily through the acquisition of debt-servicing companies and financial institutions managing large portfolios of non-performing loans (NPLs). This strategy reflected the substantial accumulation of distressed mortgage assets following the prolonged economic crisis and enabled institutional capital to gain indirect access to residential property markets. Nevertheless, the report emphasises that fragmented ownership structures and the limited availability of large residential portfolios have restricted opportunities for large-scale acquisitions. As a result, institutional investors have concentrated their activities in more specialised market segments, including short-term rentals, student accommodation and tourism-related housing, particularly in major urban centres such as Thessaloniki.

The report identifies the rapid expansion of tourism and short-term rental platforms, particularly Airbnb, as one of the principal drivers of housing financialisation in Greece. Although the presence of institutional investors remains relatively limited compared with other European countries, the report concludes that housing financialisation is becoming increasingly visible in tourism-oriented and high-demand urban areas.

Regarding broader market dynamics, the report concludes that the scale of financialisation in Greece remains comparatively modest. The country’s fragmented ownership patterns and relatively limited mortgage market have slowed the expansion of institutional investment into mainstream residential housing. Nevertheless, financialisation has emerged through niche investment strategies and the management of distressed assets. The report also notes a gradual increase in the presence of institutional investors in cities such as Thessaloniki, where their activities are beginning to influence rental prices and housing affordability within particular market segments.

Impacts on Affordability and Market Dynamics

According to the European Parliament HOUS Special Committee report, Housing Speculation in the EU: Corporate Landlords, Real Estate Trusts, Abusive Speculative Behaviour and Impacts on Prices and Transactions, the overall scale of institutional speculative activity in Greece’s mainstream residential housing market remains relatively limited. This is largely attributable to the country’s fragmented ownership structure and the limited availability of large residential portfolios suitable for institutional investment. Nevertheless, the report highlights a gradual increase in institutional investor activity within specific niche segments, particularly those associated with tourism, short-term rentals, and student accommodation.

Evidence of increasing rental prices and growing affordability pressures

The report further indicates that, where institutional investors are active, there is evidence of increasing rental prices and growing affordability pressures, especially in urban centres and tourism-intensive locations. These impacts are most evident in local housing markets where competition between residential use and tourism-related investment has intensified. Overall, while housing financialisation in Greece remains more limited than in many Western and Northern European Union Member States, it is steadily expanding within selected market segments, driven primarily by the profitability of tourism and the continued growth of the short-term rental market.

It identifies common characteristics shared with neighbouring countries, including high levels of homeownership, comparatively weak mortgage markets and the concentration of financialisation within niche sectors such as tourism, short-term rentals and student accommodation. At the same time, the report observes that Greece has one of the weakest rental regulatory frameworks in the European Union. While this regulatory environment may facilitate speculative practices in certain market segments, it has not generated conditions conducive to the large-scale expansion of institutional investment in residential housing. Overall, the report concludes that Greece represents a case of marginal but steadily expanding housing financialisation, where institutional investors have primarily entered the market through non-performing loan acquisitions and specialised investment niches rather than through the large-scale purchase of residential housing portfolios.