Greece's housing crisis deepens as diesel prices fall and inflation stays high

Eurostat data showed that Greece recorded the second‑largest drop in diesel prices among EU members in May, a decline of 8.5 % after the government extended a per‑litre subsidy. The cut helped curb transport‑related inflation amid the broader energy crisis.

The Bank of Greece warned that consumer‑price inflation surged to 4.9 % in May, well above the euro‑zone average, while productivity, demographic pressures and a persistent housing problem remain key structural challenges. A study by the State Budget Office found that 34.5 % of Greece’s 2.2 million homes are vacant; long‑term rental stock fell by more than 10 % and properties offered for sale fell by a third since 2011, driving house‑price increases of up to 96 % and sharp rent hikes.

Travel earnings rose sharply, with the central bank reporting a 36.9 % rise in tourism receipts in the first quarter of 2026, providing a significant boost to foreign‑exchange earnings. Yet Bloomberg and other analysts note a widening gap between macro‑economic recovery –‑ a budget surplus and growth above the euro‑zone average –‑ and everyday living standards: housing costs now account for about 35 % of household disposable income, and many families can no longer afford seasonal vacations.

The government has responded with measures such as extending the diesel subsidy, proposing tax incentives for long‑term rentals, streamlining inheritance and land‑registry issues, and encouraging the use of vacant homes to increase affordable housing supply.