Greek real estate market - trends and future prospects

Real estate price dynamics in Greece — key points analysis.

The Greek real estate market continues to show steady growth, despite a slight slowdown compared to previous years. According to the Bank of Greece, this growth is driven by a number of factors, including strong international demand, especially from foreign investors. In this article, we take a look at the latest trends, growth factors and the outlook for the Greek real estate market in the coming years.

House price growth in 2024

In the first quarter of 2024, house prices in Greece rose by 10.4% year-on-year in the country as a whole. However, the increase was even more significant in the major cities, with prices rising by 9.4% in Athens and 12.2% in Thessaloniki. These figures indicate the continued attractiveness of the Greek real estate market for buyers, especially in urban areas. Between January and September 2024, more than 33,000 properties changed owners, with transactions totaling €3 billion. This high activity in the market has led to a significant increase in tax revenues, up 21.2% compared to the same period in 2023.

Regional differences

It is important to note that price dynamics differ significantly from region to region. In Athens, Thessaloniki and other major cities, price growth was more significant than in rural areas of the country. Experts attribute this to the high demand for urban housing from both locals and foreign buyers.

Forecasts for the future

As for forecasts for the coming years, experts are divided in their opinions. The Bank of Greece predicts an average annual growth in real estate prices of 3% between 2023 and 2025. This is a more conservative estimate compared to the forecast of the National Bank of Greece, which expects growth of 7% between 2023 and 2024.

Factors of price growth

Experts attribute the steady growth in Greek real estate prices to several key factors:

1. Favorable tax policies: In recent years, the Greek government has introduced a number of attractive tax incentives for property buyers, which has stimulated demand from both local and foreign investors.
2. Increased tourism: Greece's tourism industry is booming, creating additional demand for rental properties, especially on the popular resort islands.
3. limited supply: Despite the increase in demand, the rate of new construction in Greece remains relatively low, resulting in a shortage of supply in the market and consequently, a rise in prices.

Housing affordability problem

Although the Greek real estate market is showing impressive growth, the Bank of Greece notes the problem of housing affordability, especially in major cities. Active investment in existing properties and insufficient new construction have led to a shortage of affordable housing for the local population. To address the housing shortage and maintain market stability, the Greek government has initiated a number of programs:

1. Housing Renovation Projects: These programs aim to renovate and modernize the existing housing stock, increasing its attractiveness and extending its useful life.
2. Incentives for new construction: The government offers tax breaks and other incentives to developers to increase supply in the housing market.
3. Affordable housing: Special programs provide for the construction of affordable housing for low-income families and certain categories of citizens.

The Bank of Greece emphasizes the importance of these initiatives to improve the quality and affordability of the country's housing stock in the long term. Despite the expected slowdown in price growth, experts do not predict a significant decline in real estate values in the near future. In regions with low demand, there may be a slight decrease in prices to stimulate sales, but the overall trend is expected to remain positive.

In addition, experts note that the Greek real estate market is still of interest to investors due to stable demand, attractive prices compared to other European countries and growth prospects in the long term.