Without a brake it evolves domestic real estate market gains rally, with home sale prices up 53.8% nationwide and 71.1% in Attica, from 2017 to the second quarter of 2023, when in the European Union it reaches 46%, according to the latest Eurostat data.
It is a key factor in the rapid increase in real estate prices construction and energy costs.
For example, construction costs from €1,000/sq.m. -€1,200/sq.m. (not counting the plot) now reaches €1,500/sq.m. -€1,700/sq.m., i.e. increased by 50%-60%.
Why are prices rising?
The main reasons that house sales prices increased:
Increase in construction costs
The cost of materials and energy has burdened the construction and therefore the final bill of a property. The increase in construction costs even reaches 50%.
Increase in sale prices / Counter-provision of land plots
From 2018 until today, both the asking selling prices of the plots and the asking percentage of consideration have increased significantly.
High Demand / Investment interest
Foreign investments in Greek real estate increased by 39% in the first half of 2023 compared to the same period last year. It is worth mentioning that in 2022 specific investments reached 2.1 billion euros, 68% more than in 2021.
At the same time, the real estate investments of the 9 Real Estate Investment Companies (AEEAP) at the end of June amounted to 4,603.4 billion from 4,430.8 billion euros in December 2022, an increase of 3.9%.
AEEAP started in 2018 with 471 properties reaching 655 in 2022 (38.4% increase). The biggest increase (19.7%) occurred between 2018 and 2019 (from 471 properties to 564), while the FFO index increased by 41.6%, from 76.46 million to 108.1 million euros.
Tourism / Returns
The rise in the tourism industry coupled with investment opportunities in the domestic real estate market due to memos and falling prices, attracted returns for investors targeting both residential and tourist properties.
Inflation / Zero deposit rates
One of the main savings tools for Greek depositors after the country’s entry into the eurozone is being abolished. We are talking about time deposits, which according to the banks, after their yields have shrunk to just above 0%, no longer have a reason to exist. A fact that, in conjunction with the rapid increase in inflation, seems to have fueled the real estate market with funds from those looking for safe investments and returns.
The sale prices of newly built houses in Attica, Thessaloniki, Patras and 9 cities in the region
Source: Daily
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