The European short-term rental market is experiencing remarkable growth, driven by new travel habits, remote work, and the demand for more flexible accommodation options. From major urban centers to seaside retreats, the demand for furnished short-term apartments is steadily increasing, offering high returns.
This trend is highlighted by the international real estate platform, Estate Agent Power, in an insightful analysis of investment prospects in short-term rentals across the continent.
Why Athens is attractive for investments
Athens, in particular, emerges as an exceptionally attractive option for investments in the sector. The Greek capital is among the fastest-growing markets post-pandemic. A combination of affordable purchase prices, rising arrivals, and year-round demand from remote workers and city-break travelers has turned it into a hotspot for both small and large investors.
Factors driving demand growth across Europe
According to Estate Agent Power, the key factors behind the rising demand for short-term rental investments in Europe are:
Strong Post-Pandemic Travel Recovery
With tourism bouncing back after the pandemic, travelers are increasingly opting for short-term rentals, attracted by better value-for-money, privacy, and a more “local” experience compared to hotels.Rise of Digital Nomads and Remote Work
The trend of remote working has transformed the demand map. Cities like Lisbon, Barcelona, and notably Athens, are seeing growing communities of digital nomads, boosting occupancy throughout the year—not just during peak season.New Perceptions of “Flexible Living”
Short-term rentals now cater not only to tourists. Europeans relocating temporarily, renovating homes, or changing lifestyles increasingly choose short-term stays, significantly expanding the market and reducing seasonality.
Why investors are turning to short-term rentals
20%–40% Higher Returns than Long-Term Rentals
In established tourist cities, daily rates can far exceed returns from conventional monthly leases, provided the properties are managed effectively.Lower Investment Risk
Access to a global audience through platforms like Airbnb and Booking, combined with the geographic diversification of multiple properties, reduces the risk of vacancy—even off-season.Professional Property Management
The rapid growth of short-term rental management companies allows investors to oversee portfolios without personal involvement—from cleaning to dynamic pricing.
Top European destinations
Lisbon: A paradise for digital nomads with a strong tourism base.
Barcelona: Consistently high demand, though with strict licensing rules.
Athens: Affordable purchase prices, rising arrivals, and year-round demand.
Budapest: Economically accessible with strong European tourist flows.
Paris: High prices and timeless demand, despite strict regulations.
Dubrovnik: A summer season leader, offering very high peak-period returns.
Risks and factors to consider
Regulatory Framework: Many cities limit short-term rentals due to housing policies. Checking permits and local laws is essential.
Seasonality: Markets dependent on summer tourism may experience vacancies in winter months.
Management Complexity: Success requires continuous monitoring, professional expertise, guest communication, and accurate pricing—tasks that can be delegated to specialized managers.
Outlook: A market poised for continued growth
Estimates indicate that the European short-term rental market will continue growing at rates above 10% annually through 2027, as travel habits evolve, platforms become more sophisticated, and digital management reduces operating costs.
