Greece Leads Europe in Housing Costs, Central Bank Says

Greece leads Europe in housing costs, November’s Financial Stability Report by the Bank of Greece (BoG) maintains.

According to the report, 27 percent of the Greek population is spending more than 40 percent of their disposable income to cover housing costs. BoG attributed the country’s position to its low per capita income compared to the rest of Europe.

BoG says that:

• Apartment prices (in nominal terms) rose by 13.9 percent in the second quarter of 2023, year-on-year, compared to an increase of 11.8 percent in 2022.
• Prices of new apartments (up to 5 years old) increased at an average annual rate of 13.8 percent, in the second quarter of 2023, while prices of old apartments rose by 14.1 percent.
• In terms of geographic region, prices in the country’s major urban centers rose significantly. This was especially the case in Thessaloniki (16.4 percent) and other major cities (14.6 percent), which exceeded the corresponding average growth rate for the entire country.

In the short term, foreign investment interest will persist, especially in privileged locations in the Attica basin and tourist areas. According to the BoG, expectations for the Greek residential real estate market remain positive, despite the uncertainties in the domestic and global economy.

Housing costs and home prices in Greece

A recent report by Bloomberg reveals home prices in Athens are surging, making the Greek capital one of Europe’s hottest housing markets.

Home prices in the Greek capital rose by 12.2 percent in October, nearly triple the gains in Stockholm. In other cities, such as Paris, there was a drop in prices, according to data compiled by Bloomberg.

“There are no properties on the market,” Lefteris Potamianos, president of the real estate association of Athens-Attica, told Bloomberg, attributing the price rise to demand stoked by a Golden Visa program.

On top of the shortage, the economy is recovering and providing locals with more spending power. Greece is forecast to grow faster than the rest of the European Union this year, and per-capita output is seen to be returning to its pre-crisis 2009 levels of more than €21,000 this year—a strong rebound from the low of €16,200 just after the country avoided an exit from the euro-area.

The rise in home prices is not only observed in Athens. According to the latest statistics, vacation home sale prices on the immensely popular Cyclades islands in Greece are at a ten-year high.

The most significant surge in prices can be observed in ultra-luxury properties featuring distinctive attributes, particularly on Mykonos.

Of all the Greek islands, the Cyclades, particularly Mykonos and Santorini which attract large numbers of tourists every year, are the most popular.