Prices for apartments in Greece have risen

Greek real estate market: skyrocketing prices and new opportunities

The Greek real estate market is experiencing a period of rapid growth. According to the Central Bank of Greece, average apartment prices in the country rose by 9.2% year-on-year in the second quarter of 2024. This impressive figure reflects the country's economic recovery and increased interest from foreign investors. However, such rapid price growth has raised concerns among market experts, who warn of potential risks.

1. Greece attracts foreign investors.
   One of the key factors contributing to rising real estate prices in Greece is increased demand from foreign investors. Many foreign buyers see Greece as an attractive place to invest. This is facilitated by the “golden visa” program, which grants a residence permit for the purchase of real estate for a certain amount. This initiative attracts wealthy investors from different countries, resulting in an influx of capital into the Greek real estate market.
2. Economic recovery stimulates local demand.
   In addition to foreign investors, the Greek real estate market is also influenced by the recovery of the national economy. After a long period of crisis, the country is showing signs of economic growth. Increased employment, rising incomes and improved consumer sentiment are stimulating local demand for housing. Greeks are becoming more confident about the future and consider buying real estate as a safe investment.
3. Athens and Thessaloniki are leading the way in terms of price growth.
   The largest increase in real estate prices is observed in the major cities of Greece, especially in the capital Athens and the second largest city Thessaloniki. In some central districts of Athens, apartment prices have even increased by more than 9.2% over the year. This is due to the limited supply of new properties in prime locations and the growing interest in urban real estate from both local and foreign buyers. Many investors consider real estate in Athens and Thessaloniki as a promising investment with the potential for further growth in value.
4. Risks of a real estate market bubble.
   Despite the positive trends, some experts are concerned about the rapid growth of real estate prices in Greece. They warn that too rapid an increase in housing values could lead to a bubble in the market. If prices rise at a rate that outpaces real demand and economic fundamentals, it could pose risks to the stability of the market in the long term. Experts urge the government and market participants to closely monitor the situation and take measures to ensure sustainable development of the real estate sector.
5. Impact of rising prices on the banking sector.
   Rising real estate prices in Greece have a positive impact on the banking sector in Greece. The increase in the value of collateral for mortgage loans improves the financial position of banks and reduces the risks associated with delinquent debt. This can encourage more lending and support economic growth. However, banks also need to be cautious and carefully assess the repayment capacity of borrowers to avoid overcrediting and potential problems in the future.
6. The problem of housing affordability for the local population.
   The rapid rise in real estate prices in Greece can also have negative consequences, especially for the local population. The rising cost of housing makes it less affordable for many Greeks, especially for young families and middle-income people. This can lead to social inequalities and make housing difficult for a large part of the population. The government needs to take measures to ensure housing affordability, for example through subsidy programs, construction of social housing and regulation of the rental market.
7. The need for a balanced development of the real estate market.
   A balanced approach is necessary for the sustainable development of the Greek real estate market. The authorities should encourage investment inflows, but ensure that price increases do not outpace real demand and the economic capacity of the population. This may include measures to increase the supply of affordable housing, regulate speculative activity and support local buyers. A balanced development of the real estate market will contribute to the long-term stability of the sector and positively impact the Greek economy as a whole.

Conclusion:

Greece's real estate market is showing impressive growth rates, reflecting the country's economic recovery and increased interest from foreign investors. The 9.2% price increase in the second quarter of 2024 indicates positive trends in the sector. However, such a rapid increase in the cost of housing also raises concerns among market experts. There are risks of a “bubble” formation and decreasing availability of real estate for the local population. Sustainable development of the market requires a balanced approach that takes into account the interests of all participants and the long-term stability of the sector. The government and market players should closely monitor the situation and take measures to maintain a healthy balance between investment attractiveness and housing affordability. Only in this way can the Greek real estate market become a solid foundation for further economic growth and prosperity of the country.