Buying a holiday home in Paros and Mykonos: why invest in the Cyclades

Why buying a holiday home in the Cyclades is a strategic investment

The Greek real estate market is in a phase of mature growth. According to the Bank of Greece interim report, in 2025 the market continued to attract strong domestic and international investment interest, particularly in residential and hospitality sectors. Prices increased further, while new housing supply remained limited due to regulatory constraints and rising construction costs.

In 2025, residential property prices rose nationwide by an average of 7.8%, while in Q4 2025 the annual increase stood at 7.6% (source: Bank of Greece). At the same time, at MIPIM 2026 in Cannes, Greece was presented as an investment destination with characteristics of scarcity.

Within this context, Mykonos and Paros consistently rank among the top choices for holiday home buyers, attracting capital from Central Europe, the US and the Middle East. According to Engel & Völkers Greece, around 85% of holiday home transactions are carried out by foreign buyers, mainly from the DACH region (Germany, Austria, Switzerland), the US, Lebanon, Israel, the Balkans and Turkey. Between 2024 and 2025, Dutch buyers increased by 16.7% and French buyers by 6.3%.

Mykonos: the peak of luxury living in the Mediterranean

Prices and property types

Mykonos holds the title of the most expensive island in the Cyclades. According to Engel & Völkers, luxury villas can reach up to €12,000 per sq.m., while GEOAXIS research reports super prime properties with asking prices up to €25,000 per sq.m.

Construction activity remains strong in large luxury homes. However, there is a notable shortage of smaller villas up to 170 sq.m., which sell quickly. Buyers typically seek modern homes with minimalist Cycladic aesthetics, private pools, panoramic Aegean views and easy beach access.

Why Mykonos remains a strong choice

Mykonos is a global benchmark for high end hospitality, luxury services and premium lifestyle. Iconic beaches, world renowned restaurants and vibrant nightlife ensure consistent demand from both buyers and tourists.

Investment returns are supported by Greece’s leading position in the European short term rental market. According to Eurostat, in Q3 2025 the country recorded over 29.3 million overnight stays via platforms, marking the highest increase of 12.3% among top EU destinations. In the South Aegean region alone, overnight stays reached 5.88 million.

At the same time, official data shows that declared tax revenues from this activity rose by 10.5% in 2025, reaching €973 million, highlighting the sector’s steady profitability.

Accessibility remains excellent, with Mykonos International Airport offering direct flights to 49 destinations across 21 countries. According to the Hellenic Civil Aviation Authority, total passenger traffic in Greek airports reached a record 83.33 million in 2025, ensuring a steady flow of visitors and investors.

Limited supply: why prices will continue to rise

The suspension of off-plan construction in Mykonos has been extended until the end of 2026. Meanwhile, the new Special Urban Plan, expected in 2026, significantly tightens building requirements, tripling minimum land size for tourism developments and doubling it for luxury residences.

This reduction in developable land, combined with the island’s geographic limitations, will drastically limit new supply, protecting and increasing the value of existing properties.

Additionally, the Greek government has introduced a freeze on new short term rental licenses in areas where listings exceed 5% of housing stock, potentially benefiting existing property owners.

Holiday homes in Paros: authenticity, growth potential and emerging luxury

Prices and property types

Paros consistently ranks among the top destinations for holiday home demand. As of December 2025, average asking prices range between €4,950 and €5,454 per sq.m. In the premium segment, seafront homes reach up to €12,000 per sq.m. according to the Engel & Völkers Market Report 2025.

Demand focuses on luxury villas with private pools, white Cycladic homes with sea views and renovated traditional houses in picturesque villages such as Lefkes, Prodromos and Marpissa.

Why Paros stands out

Paros is emerging as an attractive alternative for affluent travellers, offering beaches, charming villages and nightlife without the overcrowding of more famous destinations. Luxury tourism has been steadily growing for at least the past decade, while new high end hotels continue to enhance its international profile.

Naoussa and Parikia offer vibrant lifestyles, while inland villages provide tranquillity, making the island appealing for both seasonal visitors and second home buyers.

According to Engel & Völkers, foreign buyers account for 60% to 70% of the market, mainly from German speaking countries, the US, the UK, France and Mediterranean countries.

Naxos, Andros, Syros: three emerging alternatives

Beyond Mykonos and Paros, three additional islands are steadily rising on the Cyclades holiday home map.

Naxos: the new champion of foreign buyers

Naxos shows rising demand for properties suitable for both permanent living and short term rentals, with demand increasing by 16% in 2024. Foreign buyers account for up to 90%, the highest in Greece.

Andros: close to Athens with authentic character

Andros remains one of the most affordable Cycladic options near Athens. Demand is increasing, with land prices rising by 22.2% annually.

Syros: administrative hub with year round life

Syros is gaining strong momentum and ranks high in buyer preferences. Ermoupoli, year round activity, a marina and cultural festivals make it ideal for quality living with stable returns.

Key considerations before buying a holiday home

Buying a holiday home in the Cyclades and beyond requires careful planning. Below are the key points:

Legal and technical due diligence: Verify that the property has a valid building permit, an archaeological clearance certificate and a forestry certificate. Check whether it is located within or outside the city plan in Mykonos. Construction outside the city plan is suspended until the end of 2026.

Tax obligations: Property transfer tax amounts to 3.09% of the objective value. Owning property in Greece also entails annual ENFIA tax.

Financing: According to ECB data, in February 2026 the average fixed-rate mortgage interest (up to 5 years) in Greece fell to 2.95%, dropping below the 3% threshold for the first time since 2017.

Short-term rental regulatory framework: Since October 2025, new rules apply, including a freeze on new short-term rental licenses in areas where listings exceed 5% of the housing stock.

Professional guidance: Working with an experienced real estate advisor ensures security in the transaction. Engel & Völkers Greece, with a physical presence in Paros and a network of approximately 1,000 locations worldwide, offers specialized guidance at every step, from property valuation to legal checks and post-purchase property management.

Read the property buying guide with everything you need to know before closing the deal.

Invest in value, lifestyle and limited supply

Buying a holiday home in Mykonos and Paros combines three factors that rarely coexist:

steadily rising prices

strong rental income

institutionally secured land scarcity

At a time when the Greek real estate market is entering a phase of maturity, with prices still competitive compared to Ibiza, the French Riviera or Costa Smeralda, the opportunity to enter remains open, but the window is narrowing.

For buyers seeking more affordable yet dynamic alternatives, Naxos, Andros and Syros are emerging as islands with excellent medium-term prospects.