Uncertainty driven by inflation, continued geopolitical tensions, skyrocketing building material prices and rising interest rates have led to a sharp increase in property prices in Greece in 2022.
Although the upward trend in nominal prices continues as the housing market is still far from its all-time high recorded before the financial crisis, expected, that a slowdown in economic growth from 6% to 1-2% this year will potentially dampen residential demand growth in the coming months.
What are the forecasts for the Greek real estate market for 2023
The “slowdown, not fall”, as real estate experts say, will not “spread” the same for all categories of housing, in some cases the percentages will continue to move up, regardless of the circumstances.
These categories include elite and green houses, apartments in close proximity to metro stations and real estate in areas where the investment threshold for obtaining “Golden Visa” doubled, especially in the first few months of the year.
The choice of the Greeks to purchase residential real estate with their own funds, without the help of bank loans and the funds flowing into the Greek real estate market from abroad, are two main reasons for maintaining the “momentum” of the housing market in these categories. “A significant impact on residential property prices is unlikely to be seen anytime soon as there is usually a lag in the real estate market’s response to changes in economic data,” analysts said.
luxury housing
The elite residential real estate market is almost completely formed by foreign capital. These are large residences with an area of more than 400 square meters. m and worth 2-3 million euros, focused on the Ultra High Net Worth Individuals (UHNWI) market category. Although for the first time in five years, some areas, such as Mykonos, saw a slight decrease in prices, in others, such as the Athenian Riviera, Corfu and Paros, the upward trend continues.
According to Mr. Savvas Savvaidis, President and Managing Director of Greece Sotheby’s International Realty, which specializes in luxury real estate in the Greek islands and select locations on the mainland, “Despite historically high levels of interest in luxury real estate in Greece, there has been a significant decline in interested buyers to make deals.” However, it is added that “an analysis of data from Greece clearly indicates the long-term prospects for the Greek luxury real estate market.”
Highly energy efficient homes, most of which are newly built or a few years old, are also a category that is predicted to remain on the list of potential buyers despite high prices due to more expensive building materials.
It is noteworthy that the largest price increase in the period 2020-2022 was recorded for class A + and A houses (+ 25% and + 23% respectively), according to Spitogatos.gr. It is no coincidence that major players in the real estate market seek to develop dynamically in the sector of high-quality, highly energy-efficient housing.
“Golden Visa”
Doubling the cost acquisitions “Golden Visa” in the regional units of North, Central and South Athens, in the municipality of Thessaloniki and in the regional units of Mykonos and Santorini, is estimated to keep foreign capital flows flourishing until at least April. It is noted that if buyers pay 10% of the cost by April 30, they will be able to complete their investment with a minimum value of 250,000 euros with a limit until December 31. At the same time, taking into account inflation, this flow is likely to continue after the increase in the cost of the Golden Visa.
Apartments near metro
A disproportionately low supply of apartments with an area of 50-75 sq. m with modern characteristics near metro stations has meant that demand is maintained and may increase in the future. Whether for own housing needs or for investment purposes, housing demand in relatively new and fully refurbished medium-sized apartments in areas where metro lines have recently opened or are about to open will remain strong.
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