Israelis still target real estate in Thessaloniki

Israelis continue to express great interest in Thessaloniki’s property market, as almost 3 months after the start of the war in Gaza there is no pause in purchases or investments, and after the initial torpor and wait-and-see attitude that followed in the early days of the conflict, the market is returning to pre-war activity.

Of course, on the other hand, in Thessaloniki there is no rush to purchase real estate, as could be noticeable in the first period after the military conflicts. Pre-war demand in the real estate market continues, while Israeli investment plans to create hotels and the allocation of capital from Israeli funds to the Thess Intec technology park have not been suspended, at least not yet.

However, despite some mobility, the number of Israelis receiving golden visas in the country remains small, as despite expectations of an explosion in applications due to the war, only 183 Israelis received them, according to the latest available Immigration Ministry data from November. In September, before the conflict began, 157 Israelis received them.

The Golden Visa allows investors to obtain a residence visa with an investment amount of 250 or 500 thousand euros (depending on the region) for themselves and their family. Interest in purchasing real estate is mainly concentrated in the center of Thessaloniki and Athens, as well as in the southern suburbs of Attica, where there is a minimum investment threshold of 500 thousand to obtain a golden visa.

The war continues, investments are in full swing

In this context, the flow of funds from Israel remains unchanged and contracts are being implemented as planned. A clearer picture of the exact impact of the war on the city’s market will be available in the first quarter of 2024.

Israeli investment plans in Thessaloniki continue to focus on purchasing buildings, single-family homes, real estate, land and larger projects including hotels and residential complexes. There are also those who resell the purchased property, usually after renovation, to their compatriots, making a considerable profit.

Israelis’ emotional ties to the city, shared ideas and cultures, as well as geographical proximity draw Israelis to Thessaloniki like a magnet, while political and economic stability, favorable sales prices compared to their country, the Mediterranean lifestyle in our country and ease of access put Greek the market comes first in their preferences.

Israel also has a strong presence in Thessaloniki’s tourism sector. In 2022, Israelis became the top foreign nationality in visits for the first time in three years (since 2019), although with a decrease in overnight stays compared to pre-pandemic levels.

At the same time, the city is implementing a number of ambitious investment plans. At the corner of Tsimiski 1 and Katun streets, the Fattal Group has begun construction of the four-star NYX Thessaloniki hotel. The project, including the purchase of real estate, is estimated at approximately 22 million euros.

For 2025, based on pre-war planning, it was planned to open two hotels from the portfolio of the Israeli company Brown in Thessaloniki. Finally, the fourth generation technology park (ThessINTEC), which, if there is no further disruption to the schedule, should begin construction in Perea in 2024. It is largely supported by Israeli foundations, which have shown great interest in participating in the project.

According to BoE, in 2022, property purchases by Israelis across the country amounted to a total of 88 million euros.

Israeli Investor Profile

“The same players who were in Thessaloniki before the war now dominate the market, scanning it for profitable properties. I estimate that investment volumes will decrease as property prices rise. Israelis are looking for properties priced up to 1,200 euros per sq.m. “, and the apartment must be on the floor, not the basement, and suitable for use. At the beginning, when the war began, there was numbness, but then this was overcome”notes co-founder and CEO of Georgakos & Parthenon Real Estate, as well as President of the Greek-Serbian Chamber, Kostas Georgakos. “In Thessaloniki there is a certain part of investors from Israel who are positioning themselves on the market, now they have adapted to the war, and normality has returned to the real estate market,” – he adds.

The market is controlled by 15 players. “They are mainly interested in residential real estate in the city center and, to a lesser extent, in the east. Typically, those Israelis who buy real estate, and this is 10-15 players, either resell it to their compatriots, making a profit, or, after renovation, rent it out for a while time, and then sell it like real estate with a yield of 6%”he notes.

At the same time, according to Georgakos, the Israelis are also looking at Halkidiki, where they buy land, build real estate, and then follow “Thessaloniki models” sell or rent to their compatriots.

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