Demand from foreigners for the purchase of real estate remains, despite the rise in prices

With residential real estate prices in our country continuing to rise for the fifth year in a row, with significant regional differences, the big question is whether the increased demand from Greek and foreign investors continues.

In particular, according to the assessment of the Bank of Greece, compiled by the country’s credit institutions, in 2022 and for the fifth year in a row, there will be a significant increase in prices in the housing market, while the prices of apartments (in nominal terms) will increase by 11.1% year on year compared to growth of 7.6% in 2021 and 4.5% in 2020.

But what is happening to the demand from potential foreign and Greek buyers, given this growing trend in property markets in both urban centers and tourist destinations? Given that the Greek market is subject to its own “laws”, it can be said that the rate of price growth in recent years has been more moderate compared to other countries, and that profitability is still at an attractive level. And provided In the absence of new unforeseen developments, it is expected that real estate prices, especially luxury ones, will continue to generate increased interest.

Demand for residential property, after the waiting period leading up to the May 21 elections, continues to rise again despite the upward trend in prices, especially for properties on the Athenian Riviera and insular Greece, with a focus on the Cyclades islands, according to Mr. Yiannis Revitis, valuation economist real estate and honorary president of the Association of Real Estate Agents of Attica.

Rising real estate prices, especially for new buildings, is associated, among other things, with the rise in construction costs, as well as depending on supply and demand, says Mr. Revitis. The expert also points out that prices for premium houses, villas with high architecture and views in areas of our country, aimed at high-income investors, are starting to converge with the corresponding prices for expensive tourist resorts in Europe, while demand remains high.

Referring to the course of demand and, in general, the purchase and sale of residential property in major urban centers, designed for the average household in Athenscoupled with price movements, Mr. Revitis believes that due to inflationary pressure, increased cash costs for meeting the needs of the family and increasing the average Greek family will not show significant interest in the real estate market. However “Youth Affordable Housing Program”as well as the creation of new programs with more favorable conditions, will be important measures and will create incentives for the purchase of new housing, Mr. Revitis believes.

The expert notes that in general, the construction sector will experience growth, and demand in the northern suburbs will follow an upward trend, where it has remained subdued in recent years, while we will have a significantly increased demand in all tourist areas and especially on the islands.

Prices in some well-known tourist destinations in our country will be compared with prices on the Italian and French Riviera, while the west coast of the Peloponnese, where luxury construction is booming, will be preferred.

In the area of ​​the Athenian Riviera, the construction of the Hellinikon complex and the construction of new buildings along the coastline will increase interest all the way to Cape Sunyo. Prices will be adjusted based on regional supply and demand and will be highly dependent on construction costs, inflationary trends and rising lending rates.

Overall, the Greek property market is expected to boom in the next 2-3 years, barring unforeseen circumstances.

Price hike worries investors, but demand is remarkably resilient, says Khariton Triantafillidis, founding partner and chief financial officer of Real Vaha, a hotel and residential project company. In an attempt to “make ends meet”, individuals are looking for alternative solutions, wondering if prices will fall at all, while the big “players” seem to have great faith in the prospects of the housing market, with an eye mainly to Athens and Thessaloniki.

Because in prices continue to show an upward trend, market participants are showing some “caution”. Investors are waiting for prices to “slow down” while others fear they will miss out on a good investment if they wait another six months or a year, Mr. Triantafyllidis said.

Agility is also a strategy followed by other buyers, especially the Greek private investor. This could mean acquiring a smaller property or accepting annualized returns in the range of 5-7% per annum compared to 9-12% previously.

For foreign investors, this is a common thing. Some have started selling and profiting from both the purchases they made 3-4 years ago and the property development they completed in Athens and the islands, which means they have the money and the desire to reinvest.

Until now, many foreigners have simply observed the Greek market, but now they operate on the principle of “came-saw-won”. The fact that the first foreign buyers who bought properties in Greece have already made a significant profit attracts even more buyers from other countries, such as the Middle East and Scandinavia.

Real Vaha believes this trend will continue for some time. Improved prospects for Greece, such as the expected investment rating and business-friendly attitude from the next government, are of great importance to foreign buyers, said Mr. Triantafyllidis.

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