Cerved Property Services (CPS) presented all its data and estimates for the real estate market in Greece for 2022, as well as the trends recorded in the period 2007-2022.
The housing market throughout 2022 was characterized by strong buying appetite, excess demand, and rising prices. The pandemic and the war in Ukraine did not stop the upward trend of the last years. On the contrary, for the first time, we have seen AEEAP and institutional investors include residential complexes and large-scale “green” developments in their plans.
Villas and luxury apartments with exceptional architectural features compatible with particularly demanding sustainability indicators are now available for sale. The lack of such homes and the strong demand, not only for private use but also as a high-yield investment option, have driven their prices to extremely high levels by Greek standards.
How is Greek real estate developing?
In particular, house prices in 2022 continued their upward trajectory with some areas outperforming the nationwide trend. However, nationally price levels remain comparable to the end of 2011, and the beginning of intense price compression, while still below their historic peak in 2007 when economic conditions were quite different from today’s picture.
As stated in the report, the determining factor for the increase in prices was the interest of foreign investors in the Greek real estate market and the inflows of foreign capital that have gradually increased in recent years, as shown in the combined diagram below.
Foreign investors find high returns in Greece due to lower house prices compared to other European countries. Even for areas considered more expensive, such as the Athenian Riviera or popular Greek islands, prices are lower than other top European destinations.
Athens maintains relatively low house prices and investors see its market as an opportunity, since here they secure returns of the order of 5%, when in most Western European capitals they do not exceed 3%. The returns are much higher on the tourist islands. According to market experts, the participation of foreign buyers in the Greek housing market is predominant, as they now carry out over 50% of transactions.
The demand for housing is on the rise
Today, demand exceeds supply in the Greek housing market and comes both from Greeks for private use and from both foreign and Greek investors. Due to the rapid increase in housing rents and yields, coupled with the expected capital appreciation, residential properties have now become investment products, as investing in them compensates for inflation in the absence of more efficient and safer alternatives for investing cash reserves. But the supply is limited due to the high volume of trades that have taken place over the past three years.
The rate of housing absorption from 2017 onwards is much faster than the rate of new properties entering the market. Available-for-sale inventory has not been replenished, resulting in prices continuing to rise, although one would expect the upward trend to slow due to geo-economic conditions.
According to 59% of respondents to the latest CPS Annual Survey on the Greek real estate market (participants exceeded 200 experts nationwide), there was a surplus of demand in the market in 2022 compared to 2021.
As mentioned in the report, on the other hand, inflation, with the consequent increase in construction costs and the contraction of household incomes, the increase in mortgage interest rates and the general economic insecurity have created a disproportionate picture in the Greek housing market.
Most households turn to rent, which contributes to the increase in rental values. On the contrary, the vital interest of foreign and institutional investors, the investment role of the home and the lower exposure of buyers to bank lending drove prices on an upward path into 2022 as well.
In terms of price trends, 55% of CPS survey respondents expect to see prices stabilize in 2023. In contrast, 37% expect an increase and just 8% a decrease.
Source: APE – MEB
#Real #estate #High #demand #purchases
**Interview with Maria Xenakis, Real Estate Analyst at Cerved Property Services**
**Interviewer:** Thank you for joining us today, Maria. We’ve seen a remarkable surge in demand for properties in Greece, with reports suggesting a 30% increase in holiday residencies. What are the main factors driving this trend?
**Maria Xenakis:** Thank you for having me. The increase in demand for holiday residencies can be attributed to several factors. The pandemic has led many individuals to reassess their living situations, with a growing inclination towards properties in more desirable, often warmer locations. Greece has always been a prime destination due to its rich culture and stunning landscapes, and post-pandemic, we’ve seen an uptick in both domestic and international interest.
**Interviewer:** You mentioned foreign investors playing a significant role in this market. Can you elaborate on how their involvement is shaping the landscape?
**Maria Xenakis:** Absolutely. Foreign investors are reshaping the Greek real estate market. Currently, they make up over 50% of property transactions. Many are attracted to Greece because of the comparatively lower property prices, which offer them a significant return on investment — around 5% in Athens, compared to 3% in most Western European capitals. This influx of foreign capital is not only driving up prices but also encouraging developments in high-quality residential complexes and sustainable projects.
**Interviewer:** It sounds like the market is quite competitive. How are local buyers coping with this rising demand and increasing prices?
**Maria Xenakis:** The competition is indeed fierce. Local buyers are facing challenges due to rising prices, but there’s still a robust appetite for properties. Many Greeks are looking for homes for personal use, and while prices are climbing, the opportunities for investment remain appealing. The national average for property prices is still below the pre-crisis peak, so there’s some room for growth, making it an attractive option for local buyers as well.
**Interviewer:** With luxury apartments and villas leading the way, do you see this trend continuing in the coming years?
**Maria Xenakis:** Yes, I do. As long as demand continues to surpass supply, especially for unique, sustainable properties, we can expect high-end real estate to thrive. The current environment, characterized by a lack of available homes and an increasing focus on sustainability, suggests that we might see sustained price increases and ongoing interest from investors, both local and international.
**Interviewer:** Thank you, Maria, for your insights. It’s clear that the Greek real estate market is evolving rapidly.
**Maria Xenakis:** Thank you for having me! The developments in Greece’s real estate market are indeed exciting, and it will be interesting to see how they unfold in the future.
