Short-term property rentals in Greece, already affected by market saturation and competition from new and cheaper nearby markets in 2019, saw their bookings devastated in the first half of 2020 as Covid-19 made its impact.
However, looking at the results of the pandemic-hit summer season now drawing to its end, industry experts are reasonably confident in anticipating a recovery to previous levels by Summer 2021 — but only in tourist hotspots, unless the model for city-based rentals changes.
Themistocles-Andreas Bakas, head of the E-Real Estates Network, explains “This past summer, the properties favored by foreign and local tourists alike were independent properties listed for short-lets.
“Data shows that, despite the reduced number of visitors, those who did travel to Greek destinations chose primarily short-term rentals at properties in holiday locations close to the sea, even along the coast of southern Attica. Therefore, we expect these properties to work really well next tourist season, even better than in summer 2020.”
On the other hand, the real estate broker reckons that short-term rentals in busy city centers such as Athens and Thessaloniki could prove more dependent on a return to normalcy, as the pattern increasingly shifts towards renting for longer periods.
Following a sharp increase in supply over the course of two years, nearly 30% of properties had turned to long-term rentals at the conclusion of the peak season in 2019 — albeit at prices and terms which would normally only be appropriate for short-lets.
This trend was accelerated by the volume of cancellations by Chinese and British visitors in early 2020, brought on by the rapid worldwide spread of Covid-19.
“Initially, the owners kept their short-term rental properties on stand-by to see how the 2020 summer season would roll out. They rented them out for longer, but limited, periods of between five to twelve months, because they aimed to return to short-term rentals from September onwards,” Bakas states.
“But now, as they realize that a new wave of the pandemic is very probable, many owners are lowering their expectations significantly and returning to conventional long-term rentals, either by reducing rental prices or by also increasing the duration of the rental to the minimum three-year contract that is legally required for long-term residential rental in Greece,” he adds.
Small private owners are the worst affected by this decrease in demand. The drop in bookings has proved especially devastating for those relying heavily on short-term rentals as their main source of income, or operating on a buy-to-rent business plan.
Bakas explains “80% of short-term rentals in Greece are run by private individuals. However, the Greek state has essentially only compensated the registered companies in this sector for their losses.
“It is understandable that a fraction of the small, private owners have needed to turn to conventional long-term rentals just to meet their financial obligations. Those who have been affected are usually the owners of only one or two short-let properties, whereas those who own more properties tend to offer one or two of them for long-term rental to secure some income, while keeping the rest of their properties on stand-by until they see how the pandemic crisis unfolds.”
Property management companies still routinely rent one or two properties short-term at reasonable prices to make up for their losses while they keep their best assets — in popular areas, such as Koukaki, Metz and Thisseion in Athens — on stand-by, he adds.
“If the sector was to return to its previous state, it would be fundamental to recover from the pandemic and to restore the sense of security and health of travelers as well as our travel connections with the other member-states of the EU and the airlines,” Bakas says.
“As long as the pandemic continues with new waves and more cases, I believe that short-term lets will be badly affected”, he concludes.
Spilios Papaspiliou, Operations Manager of short-lets property management company GemBnB, told Greek Reporter that he saw his bookings drop by as much as 90% since March, but pick up quickly once international flights and cross-border arrivals were restored in July.
“Since then, we have been working on a 20-30% occupancy,” he says. “It has been consistent, although far short of satisfactory. Being reservedly optimistic, I would say that from May 2021 we should return to over 50-60%, if not full occupancy. Obviously, this will depend on what happens with the pandemic and its social impact,” he states.
Although their listings did well over the summer, especially those in coastal areas around Athens, some of which have even enjoyed 90-100% occupancy, Papaspiliou concurs that 30-40% of Greek owners withdrew their properties in recent months.
And this is not only because they couldn’t afford the time to wait for this type of rental to pick up again, preferring to turn to long-term rentals, but also, in some cases, out of fear of the pandemic itself. He does expect a percentage of the withdrawn owners to return in the post-pandemic world, however — at least those who had always enjoyed good returns.
“The Greek market is constantly shifting, with many ups and downs,” Papaspiliou says. “I believe that there is a future and that the short-term rentals sector is definitely here to stay.
“But the model that works will shift; its foundations will change slightly and will not be exactly the way we knew it and worked with it before. There used to be many low-quality properties listed on the market and these did make some money in previous years, but this is unlikely to continue,” he explains to Greek Reporter.
“Quality will play an increasingly important role in rentals, and those who invest and have the infrastructure will survive. The shift will be towards better properties in good locations, so that there will be a higher standard of provision. The old model of fast and easy money that existed is over,” he states emphatically.
According to data shared by the E-Real Estates Network, the so-called “sharing economy” contributed 444 million euros in taxes to the Greek state over the past three years, while its profits between June, 2018 and May, 2019 reached 1.15 billion euros.
At the end of 2019, a total of nearly 95,000 short-let properties were listed in Greece.