Greece is betting billions of euros that building more homes can ease its housing crunch. But the government’s new strategy could also redraw the competitive landscape for property developers, giving companies with access to public land and subsidized financing a potentially significant cost advantage.
The National Housing Strategy for 2026-2035, recently approved by the government, includes 50 measures with a budget exceeding €6.5 billion. Fourteen are new initiatives, and the broader goal marks a shift in Greek housing policy: away from primarily subsidizing demand and toward increasing supply.
That distinction matters. Housing allowances help households pay rent but don’t create apartments. When homes are scarce, additional purchasing power can instead contribute to higher prices. The new strategy seeks to attack the shortage directly by bringing vacant properties back into use, developing new housing and creating a permanent stock of affordable and social homes.
ΔΙΑΒΑΣΤΕ ΕΠΙΣΗΣ
For developers, some of the most important provisions involve public - private housing projects and government-backed financing. Under a model known in Greece as “social consideration,” private contractors will be able to develop or renovate publicly owned property. At least 30% of the resulting housing would remain under the control of the contracting public authority for social rental.
Government's financing tools
The government also plans financing tools including low-interest loans, interest subsidies, guarantees and co-financing arrangements for affordable-housing developments. In exchange, developers would make some units available at below-market rents. The model could unlock projects that wouldn’t otherwise be financially viable. It could also produce a two-speed development market.
A company financing a residential project with conventional bank debt faces different economics from a rival receiving subsidized credit or a state guarantee. A developer borrowing at an effective 2% rate, for example, can have a meaningful advantage over one paying 5%, particularly on a large, multiyear project. Public land can widen the gap further. Greece plans to make state-owned sites available for affordable housing, including on islands where shortages have made it difficult to house teachers, healthcare workers and other essential staff. In 2024-2025, housing needs were recorded for 3,086 workers across 31 island municipalities, while local initiatives accommodated only 233.
Land is among the biggest costs in residential development. A company building on public property under favorable terms therefore starts from a different cost base than one buying land at market prices.
That puts greater weight on how Greece designs its tenders. Large projects and complex financing arrangements may naturally favor developers with bigger balance sheets, stronger banking relationships and greater administrative capacity.
The government’s challenge is therefore broader than increasing housing supply. It must ensure that the benefits of cheaper capital and public land are reflected in affordable homes - and don’t simply create an advantage for a small circle of developers.
