The property price index is growing steadily across Europe, showing, on the one hand, that it has long since overcome the shock of the economic crisis of the last decade, and on the other hand, that it is unaffected by the unprecedented downturn in economic activity caused by the pandemic.
Greece is perhaps the most typical example, as in parallel with the tough fiscal measures that were adopted, property prices “fell” due to the lack of consumer demand.
However, the country is not the only example of such a paradox. According to a Eurostat survey, the property price index in Europe has declined slightly since mid-2011, and the decline did not stop until 2014. And already in 2015, the rise began again.
Greece did not follow this upward trend and the real estate market “kicked up” much later, towards the end of 2018.
Despite the fact that almost all EU countries saw an increase in prices between 2010 and 2020, Greece is one of the four countries where prices fell as much as possible (28.1%). The other three countries are Italy, Spain and Cyprus.
In contrast to property prices, rents, according to Eurostat, have maintained a steady upward trend during this period. The only exceptions are Greece (down 25.2%) and Cyprus (4.1%). Especially in the case of Greece, this trend can be explained by the fact of a significant reduction in disposable incomes of the population during the economic crisis, when GDP per capita “sank” and the country suddenly found itself in the third category of European countries.
Real estate: where the rise in prices comes from?
But what is the current picture of the rental market in Greece? Despite the severe shocks caused by the pandemic, the loss of savings that have never been recovered (this “story” of impoverishment of the people stretches back from the memorandum period), and a new shock on the labor market due to the health crisis, rents seem to be , grows “by itself”, in spite of everything.
In the last 12-18 months, this can be explained, at least in certain areas, by the huge demand for real estate for short-term rent, which ultimately led to unimaginable rental rates.
At the same time, the demand for real estate under the Golden Visa program also increased. Now the main reason for the steady tendency of rental growth is the lack of housing. In particular, construction activity has not yet recovered, as a result of which the supply of real estate is out of proportion to demand.
According to spitogatos.gr, in the first quarter of the year, the country recorded an increase of 0.5%, but this indicator varies significantly in different regions of the country.
For example, in the Cyclades, with already high rents, a drop of 54.30% was recorded. On the other hand, Crete saw a 14.50% increase in rents.
As for Athens, the center is “paying” for the reduced demand for short-term rentals, while in the southern suburbs of the capital there has been a rationalization, although the price exceeds 10 euros per sq.m.