The dynamics of the real estate market in Greece is maintained both in 2023 and in the first quarter of 2024, according to the Greek Economy Bulletin, “Dynamics of the Real Estate Market in Greece. demand, prices and supply” Alfa Bank.
In particular, the residential real estate price index published by the Bank of Greece increased by 13.8% in 2023, and by 10.4% annually in the first quarter of this year.
Meanwhile, office and retail prices rose 5.9% and 6.9% respectively in 2023, according to the latest available data.
Over the past six years, the growth trajectory followed by the house price index in Greece has led to a cumulative recovery of 66% compared to the third quarter of 2017, Alpha Bank analysts explained in the Economic Research Economic Developments Bulletin.
Accordingly, commercial real estate indices have generally increased by about 33% compared to the low prices they recorded during the financial crisis.
It should be noted that property prices In Greece, they have grown even during the pandemic, despite the negative impact on economic activity, while growth rates have accelerated in the last two years.
The flexibility of the housing market in Greece, in contrast to the Eurozone, where both residential and commercial real estate prices have fallen in the last year, is that:
First, to the fact that real estate prices in our country have not fully recovered compared to the levels registered before the financial crisis.
In particular, apartment prices remain 4% lower than in 2008. from the highest point recorded in the third quarter, while office and store prices were up 10% and 3.5%, respectively, from 2010. compared to their highest prices in the first half.
In addition, if real estate prices in the Eurozone were increasing during the four-year period 2014-2017, they continued to decline in Greece, parallel to the decline in demand and economic activity in the country.
Secondly, in the positive rates of economic growth in Greece since 2018, which have been significantly higher than the European average in the last three years.
According to current forecasts: GDP: In Greece, it is expected to continue to grow at a higher pace than the European Union (EU-27) in the next two years, which is confirmed by the results of the first quarter (see Economic Development Bulletin 12.06.2024).
In particular, the real GDP in our country increased by 2.1% annually in the first quarter of 2024, compared to the average of 0.5% in the EU-27 countries.
Along with GDP growth, labor market conditions are also improving, with employment strengthening significantly and the seasonally adjusted unemployment rate gradually falling to 10.8% in April 2024, from 20.1% in the same month of 2018.
Third, on the performance of tourism and the development of the exchange economy. Tourism arrivals and arrivals are at historically high levels in both 2019 and 2023, reflecting, among other things, the significant increase in nights available on digital platforms through the sharing economy.
The question size is based on Eurostat’s experimental statistics of 36.4 million in 2023, up from 20.3 million in 2018 (Figure 2b).
Finally, strong foreign direct investment (FDI) related to real estate in Greece, which amounted to 2 billion euros in the two years 2022-2023, compared to an average of 0.4 billion euros in the previous decade.
The implementation of the “Golden Visa” program, which encouraged citizens of third countries to purchase real estate in the territory of the European Union, gave a significant boost to FDI in real estate in our country.
The strong interest of foreign investors, however, can be mitigated by increasing the limits of the mentioned program starting from August 2023.
The increase in the value of real estate in the country is likely to have an increasing impact on the construction investment initiative, which is reflected in various indicators of the economic situation, for example, private construction activity, which has almost doubled in terms of area (+ 79%) and has been growing at an average annual rate since 2018 15% by volume (m3).
In addition, construction investment has been on a strong growth trajectory since 2020, contributing significantly to overall investment growth.
The evolution of the respective indicators at the EU-27 level varies significantly, as new building permits (in terms of surface area) decrease year-on-year from the second half of 2022, while investment in construction gradually weakens with the pace of change. Making 1.1% in 2022, from 5.3% in 2021 and moving into negative territory (-0.4%) in 2023.
