When will the bubble in the Greek real estate market “deflate” – analysis and forecasts

Real estate market in Greece reached new all-time highs: Apartment prices – both new and old – have risen to levels never seen before.

After several years of rapid growth, analysts are beginning to ask: Is this a market bubble or a long-term investment opportunity?

According to realtors, recently in different regions of Greece a gradual stabilization of prices began to be observedwhich could be a harbinger of a price decline. At the same time, Greek households remain under greatest housing pressure in Europe — the ratio of housing costs and income here most unfavorable in EU.

Some experts warn: cooling phase beginswhen prices skyrocket will give way to a moderate decline. However, the new price level is still will be higher than before the pandemic. This will also be affected government programs – “Social housing” And “My house 2” aimed at solving the housing crisis. Their effect, according to analysts, will appear gradually.

Position of the European Commission

European Commission in its latest report Housing in the European Union (ECOFIN, 2025) warns about overheating of the Greek real estate market. According to her, housing costs in Greece are 20% higher level justified by fundamental economic indicators – household income, lending rates and the state of the economy.

Since 2018 housing prices have increased by more than 60%and rent – at 45%(up to 100% in Attica). This places the country among the top three hottest markets in Europe.

Bank of Greece data

According to Bank of Greece (ТτΕ), in the second quarter of 2025 apartment prices increased by 7.3% year on yearexceeding the historical maximum of 2008. The price index reached 107.5 points against 102.2 in the third quarter of 2008.

• New apartments (up to 5 years): growth by 6.8% year on year, index 112.4 versus 103 in 2008 (+9.4 points).
• Old apartments: growth by 7.6%, index 104.5 versus 101.7 previously.
• The greatest growth was recorded in Thessaloniki and regions of the country – 8.8% per year.
• IN Athens the growth was 5.9%, the index was 112.2, which is 10.8 points higher than the historical maximum of 2008.

Will there be a decrease?

According to the Bank of Greece, in the short term the upward trend will continue. Strong domestic and foreign demand, limited supply and slow construction rates are keeping prices high. The main factors behind the shortage are investment speculation in housing, the auctioning of apartments due to non-performing loans and the weak recovery of the construction sector after a decade of recession.

Even if the market “cools down”, experts are confident that the price drop will be moderate, and the new level of stabilization will remain significantly higher than pre-crisis. Thus, the bubble may “deflate” but it won’t burst. However, everything depends on the economic and political situation of Greece.

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