Why short-term rental bans aren’t cooling housing prices: Lessons from Lisbon to Athens

The bans that various cities in Europe have imposed on new short-term rental accommodation appear to be ineffective in containing housing prices. In fact, the case of the Portuguese capital illustrates that policy measures are beginning to change, as a different approach is required.

At the end of 2025, the city of Lisbon abolished the ban on new short-term rental accommodation in the city center, a measure that had come into force in 2019, as it turned out it has had absolutely no effect on the course of prices.

This is the first case of a city in Europe to take such a move, as the ban on new accommodation does not seem to be the solution to the problem. Overall, Portugal seems to be facing an increasingly severe housing problem, as, according to data from the European Central Bank, housing sale prices increased by 23.35% in 2025, making the Iberian country “a champion” in the EU.

In Greece, where similar concerns and difficulty in accessing the housing market for the domestic population are observed, as well as a housing supply deficit, a ban on the operation of new short-term rental accommodation has also been implemented since the beginning of 2025. This ban was extended this year and concerns the first three municipal districts of the Municipality of Athens, covering essentially all the popular districts for short-term rentals, from the commercial triangle to Pangrati and Neos Kosmos.

However, in 2025 the average asking price in the Municipality of Athens recorded an annual increase of 11.6%, to €2,400 per square meter, surpassing any other area in Attica. Also, especially regarding the areas around Omonia Square and Syntagma, that is, exactly where the ban on new housing was implemented, the increase in 2025 reached 22.8%.