The Rise of Serviced Apartments: Blending Hospitality and Residential in Greece

Reading time: 12 minutes

Table of Contents

1. Introduction
2. The Greek Real Estate Landscape
3. Understanding Serviced Apartments
4. The Growing Demand for Serviced Apartments in Greece
5. Economic Impact of Serviced Apartments
6. Investment Opportunities in Greek Serviced Apartments
7. Regulatory Framework and Legal Considerations
8. Future Outlook for Serviced Apartments in Greece
9. Conclusion
10. FAQs

1. Introduction

As we delve into the evolving landscape of Greek real estate, a fascinating trend has emerged that merits close attention: the rise of serviced apartments. This hybrid model, blending the comfort of residential living with the convenience of hotel amenities, is reshaping the hospitality sector and creating ripple effects throughout the Greek economy. In this comprehensive analysis, we’ll explore the factors driving this trend, its economic implications, and the investment opportunities it presents.

The Greek real estate market, long a cornerstone of the country’s economy, is undergoing a transformation. Traditional hotels and long-term rentals are increasingly sharing the spotlight with serviced apartments, a trend accelerated by changing traveler preferences and the global shift towards more flexible living arrangements. This article aims to provide a data-driven, multi-dimensional analysis of this phenomenon, offering insights for investors, policymakers, and industry stakeholders.

2. The Greek Real Estate Landscape

To understand the rise of serviced apartments, we must first contextualize it within the broader Greek real estate market. Greece, with its rich history, stunning landscapes, and Mediterranean climate, has long been a magnet for tourists and property investors alike. However, the market has faced significant challenges in recent years, including the aftermath of the 2008 financial crisis and the more recent impact of the COVID-19 pandemic.

Despite these headwinds, the Greek real estate sector has shown remarkable resilience. According to data from the Bank of Greece, property prices in urban areas have been on an upward trajectory since 2018, with a year-on-year increase of 7.3% recorded in the second quarter of 2021. This recovery has been particularly pronounced in sought-after locations such as Athens and popular island destinations.

Key Market Indicators

• Urban property prices: +7.3% YoY (Q2 2021)
• Foreign Direct Investment in real estate: €875 million (2020)
• Tourist arrivals: 31.3 million (2019, pre-pandemic peak)

These figures underscore the enduring appeal of Greek real estate, both for domestic buyers and international investors. The greece investment visa program has further bolstered foreign interest, offering residency permits to non-EU nationals who invest in Greek property.

3. Understanding Serviced Apartments

Serviced apartments represent a unique hybrid in the accommodation sector, bridging the gap between traditional hotels and residential rentals. These units typically offer the space and amenities of a private apartment combined with hotel-like services such as housekeeping, concierge, and sometimes even room service.

The concept has gained traction globally, driven by several factors:

• Changing traveler preferences, particularly among millennials and digital nomads
• The rise of extended-stay business travel
• Increasing demand for ‘home-away-from-home’ experiences
• The growth of the sharing economy and platforms like Airbnb

In Greece, serviced apartments are particularly well-suited to the country’s tourism-driven economy and the growing trend of ‘bleisure’ travel, which combines business and leisure.

4. The Growing Demand for Serviced Apartments in Greece

The demand for serviced apartments in Greece has seen a significant uptick in recent years, driven by both domestic and international factors. This trend is particularly evident in major urban centers and popular tourist destinations.

Demand Drivers

1. Tourism Recovery: As Greece’s tourism sector rebounds from the pandemic, there’s a growing preference for more spacious, self-contained accommodation options.
2. Digital Nomads: Greece’s recent introduction of a digital nomad visa has attracted remote workers seeking longer-term, flexible living arrangements.
3. Investment Appeal: Serviced apartments offer attractive yields for investors, often outperforming traditional residential rentals.
4. Urbanization: The ongoing trend of urbanization in Greece is creating demand for flexible urban living solutions.

Data from the Hellenic Statistical Authority shows that the number of nights spent in non-hotel tourist accommodations (which includes serviced apartments) increased by 15% between 2015 and 2019, outpacing the growth in traditional hotel stays.

5. Economic Impact of Serviced Apartments

The proliferation of serviced apartments is having a multifaceted impact on the Greek economy, extending beyond the real estate and hospitality sectors.

Direct Economic Contributions

• Job Creation: The serviced apartment sector is generating employment in areas such as property management, housekeeping, and guest services.
• Tax Revenue: Increased property transactions and tourism-related spending contribute to government coffers.
• Urban Regeneration: The development of serviced apartments often involves the renovation of existing buildings, contributing to urban renewal efforts.

Indirect Economic Effects

• Support for Local Businesses: Serviced apartment guests often stay for longer periods and are more likely to engage with local businesses and services.
• Attracting Foreign Investment: The sector’s growth is drawing international investors, contributing to capital inflows.
• Diversification of Tourism Offerings: Serviced apartments help broaden Greece’s tourism product, potentially extending the tourist season.

A study by the Greek Tourism Confederation (SETE) estimates that for every €1 of tourism revenue, an additional €1.2 to €1.65 is generated in related economic activity. This multiplier effect underscores the broader economic significance of the serviced apartment trend.

6. Investment Opportunities in Greek Serviced Apartments

The serviced apartment sector presents compelling investment opportunities in the Greek market. Here’s a closer look at the key considerations for potential investors:

Yield Potential

Serviced apartments typically offer higher yields compared to traditional residential rentals. According to data from real estate consultancy Algean Property, prime serviced apartments in Athens can achieve gross yields of 5-7%, compared to 3-4% for standard residential properties.

Location Strategies

Prime locations for serviced apartment investments include:

• Athens: Particularly in central neighborhoods like Koukaki, Plaka, and Kolonaki
• Thessaloniki: Greece’s second-largest city, with a growing business and student population
• Island Destinations: Popular spots like Mykonos, Santorini, and Crete for tourism-focused investments

Investment Vehicles

Investors can participate in the serviced apartment market through various means:

• Direct property acquisition and management
• Real Estate Investment Trusts (REITs) focused on hospitality assets
• Fractional ownership schemes
• Partnership with established serviced apartment operators

It’s worth noting that the greece investment visa program can be an additional incentive for non-EU investors, offering residency permits for qualifying real estate investments.

7. Regulatory Framework and Legal Considerations

Navigating the regulatory landscape is crucial for success in the Greek serviced apartment market. Key legal considerations include:

Licensing Requirements

Serviced apartments in Greece typically fall under the category of ‘furnished rentals for tourists’ and require specific licenses from the Greek National Tourism Organization (GNTO). The licensing process involves meeting certain standards for safety, hygiene, and amenities.

Taxation

Income from serviced apartments is subject to Greek tax regulations. As of 2021, rental income is taxed at progressive rates ranging from 15% to 45%. There’s also a solidarity surcharge of up to 10% on high incomes, though this is set to be abolished from 2023.

Zoning Regulations

Local zoning laws may impact the ability to operate serviced apartments in certain areas. It’s essential to check local regulations, particularly in historical or protected districts.

Short-Term Rental Restrictions

In response to concerns about the impact of short-term rentals on local housing markets, some Greek municipalities have introduced restrictions. For example, Athens has limited the number of days a property can be rented short-term to 90 days per year (or 60 days in some cases).

8. Future Outlook for Serviced Apartments in Greece

The future of the serviced apartment sector in Greece looks promising, driven by several key trends:

Continued Tourism Growth

Despite the temporary setback from the COVID-19 pandemic, long-term projections for Greek tourism remain positive. The World Travel & Tourism Council forecasts that Greece’s travel and tourism sector will grow at an average annual rate of 3.5% over the next decade, outpacing the overall economy.

Evolving Work Patterns

The global shift towards remote work and digital nomadism is likely to sustain demand for flexible, home-like accommodation options. Greece’s digital nomad visa program positions the country to capitalize on this trend.

Urban Regeneration Projects

Major urban renewal initiatives, such as the Hellinikon project in Athens (Europe’s largest urban regeneration project), are set to create new opportunities for serviced apartment developments.

Sustainability Focus

There’s growing emphasis on sustainable and eco-friendly accommodation options. Serviced apartments, with their typically lower environmental impact compared to traditional hotels, are well-positioned to meet this demand.

Technology Integration

The adoption of smart home technologies and contactless services in serviced apartments is likely to accelerate, enhancing guest experiences and operational efficiency.

9. Conclusion

The rise of serviced apartments in Greece represents a significant shift in the country’s real estate and hospitality landscape. This trend is not merely a fleeting phenomenon but a structural change driven by evolving traveler preferences, changing work patterns, and the enduring appeal of Greece as a destination.

For investors, the serviced apartment sector offers attractive yields and diversification opportunities, particularly when combined with initiatives like the greece investment visa program. However, success in this market requires careful consideration of location, regulatory requirements, and operational strategies.

As Greece continues to recover from the economic challenges of the past decade and adapts to the post-pandemic reality, the serviced apartment sector is poised to play a crucial role in the country’s economic resurgence. By blending the best of residential and hospitality offerings, serviced apartments are not just meeting current market demands but are shaping the future of accommodation in Greece.

The economic impact of this trend extends far beyond the real estate sector, contributing to job creation, urban regeneration, and the diversification of Greece’s tourism offering. As such, the growth of serviced apartments should be of interest not just to investors and industry stakeholders, but to policymakers and anyone with a stake in Greece’s economic future.

In conclusion, the serviced apartment phenomenon in Greece is a testament to the country’s ability to adapt and innovate in the face of changing global trends. As this sector continues to evolve, it will undoubtedly play a significant role in shaping the future of Greek real estate and hospitality.

10. FAQs

1. Q: What are the main differences between serviced apartments and traditional hotels in Greece?

   A: Serviced apartments typically offer more space, kitchen facilities, and a home-like atmosphere, while still providing hotel-style services such as housekeeping. They are often more suitable for longer stays and offer better value for families or groups.

2. Q: How does the greece investment visa program relate to serviced apartment investments?

   A: The Greece Golden Visa program allows non-EU nationals to obtain residency permits through qualifying real estate investments, including serviced apartments. This can be an attractive option for investors looking to combine property investment with residency benefits.

3. Q: Are there any restrictions on foreign ownership of serviced apartments in Greece?

   A: Generally, there are no significant restrictions on foreign ownership of real estate in Greece, including serviced apartments. However, properties in certain border areas may require additional permissions for non-EU buyers.

4. Q: What are the typical yields for serviced apartment investments in Greece?

   A: Yields can vary depending on location and property type, but prime serviced apartments in popular areas can achieve gross yields of 5-7%, which is generally higher than traditional residential rentals.

5. Q: How is the Greek government supporting the growth of the serviced apartment sector?

   A: The Greek government has introduced several initiatives that indirectly support the sector, including the digital nomad visa program, tourism promotion efforts, and urban regeneration projects. However, investors should stay informed about any new regulations or incentives specifically targeting the serviced apartment market.

Article reviewed by Alexandros Ioannidis, Senior Wealth Manager | Multi-Asset Portfolio Specialist | Building Customized Investment Solutions for High-Net-Worth Clients, on March 14, 2025