From the beginning of 2018 to the third quarter of 2021, house prices in Athens increased by 30% -32%, in Thessaloniki by 21% -25%, by 9% -14% in other major cities and by 10% -16% in others. parts of Greece.
This clearly indicates a new upward cycle, which has included several regions, but especially the two large urban centers of Athens and Thessaloniki. However, according to Mr. Babis Charalambopoulos, a scientific consultant for the real estate services company Solum Property Solutions, despite such a significant increase in prices, real estate in Greece is still cheaper by 22-35% (depending on the region) compared to 2007 year.
According to Mr. Haralambopoulos, there are forces in the new regularity of the real estate market that are pushing the market upward, while others are acting in the opposite direction. For example, on the one hand, there is an increased demand and, as a result, a tendency for prices to rise in several new buildings, which, moreover, are usually located in good locations.
On the other hand, the pandemic is having a serious impact on the economy, which prevents a significant part of the middle class from planning the housing market and forces them to focus on rent. In addition, although banks are now issuing mortgage loans, many are still reluctant to do so due to the negative experience with red loans. In addition, they must have equity capital of at least 25% of the value of the acquired property. “So we are in a transitional phase with two major trends that drive prices up or down. “These two trends will create a new pricing base that will vary according to city, location, property size, quality and condition, age and other characteristics,” said Mr. Haralambopoulos.
According to him, the demand is fixed for older buildings, if they are in a good location, of the appropriate size and reasonable price, given that the buyer will also allocate money for the modernization of the property. Also, there will be a constant demand for housing in cities where there are many students, as long as the number of students does not decrease.
In addition, there is an upward trend in the prices of holiday homes on the country’s world famous resort islands such as Mykonos, Santorini, Rhodes, Corfu and Paros. Demand for cottages will also be observed in other areas, for example in Northern Greece, where there are buyers from the Balkans.
In this context, there is a constant stimulation of building activity. From 2014 to this year, the increase reaches 90%. However, compared to 2007, when the real estate market was at its peak, the current level of building permits remains 69% lower.