While Greeks complain about house prices and rentals going through the roof, there is great interest from foreign buyers in several parts of Greece.
Foreign investors, digital nomads, and Golden Visa seekers constitute a burgeoning niche in the housing market. Based on economy figures, credit institutions predict that, in 2024, house pricing will reach the 2008 high. This was a year before Greece’s economic crisis began.
Housing prices showed a double-digit increase in 2023. The Attica region and the wider area of Thessaloniki remain the most popular areas in the country, although the volume of sales has partially declined, as a result of high prices.
The house price index in Greece shows a cumulative rise of 66 percent over the past six years compared to the lowest price recorded in the third quarter of 2017. House prices remain 4 percent below the highest point recorded in the third quarter of 2008. According to BNP Paribas, 2024 is expected to be a landmark year for the Greek real estate market since it will move higher than the pre-debt crisis levels of 2008.
According to the Global Property Guide, Greek house prices continue to accelerate due to high demand from foreign homebuyers. There is also increased construction activity that goes along with a gradual economic growth.
Based on Bank of Greece research, the main driving force behind increasing house prices is rising construction costs. Simultaneously, the Golden Visa program and annual increase in tourist arrivals also correspond to a growth in the construction sector and hence housing prices.
House price indices
According to the apartment price indices published by the Bank of Greece, the housing market throughout the country continues to record strong annual rates of price increases. However, the report shows a slowdown of sales in the last quarters of 2023.
More specifically, according to data collected by Greek credit institutions, in 2023, the country’s housing market saw a significant price increase. Apartment prices (in nominal terms) increase by 13.4 percent year-on-year compared to an increase of 11.9 percent in 2022 and 7.6 percent in 2021.
Prices of old apartments (over five years old) in 2023 increased at an average annual rate of 14.2 percent. This was slightly higher than that of new apartments (12.4 percent). Disaggregated by geographical region, strong annual price increase rates were recorded in major urban centers.
The highest annual rates of increase in prices, higher than the average annual rate for the whole country, were recorded in Thessaloniki (16.2 percent), in other major cities (14.5 percent), and in Athens (13,7 percent), while in the other regions of the country, the increase rate was lower (10.8 percent).
Based on data from Spitogatos, a housing sale and rental listing platform, during the second quarter of 2024, the average asking price of residential sales was 2,410 euros per square meter against 2,143 euros in the corresponding 2023 period. This reflects an increase of 12.45 percent. A similar increase appears in terms of residential rental prices with the average asking price set at 9.85 euros per square meter.
The first quarter of 2024 saw significant price acceleration in certain parts of Greece, such as the suburbs of Piraeus (+23.6 percent), in the center of Athens (+12.40 percent), and in the eastern Athens suburbs (+12.80 percent). In the rest of Greece, the highest price increase is found on the Sporades islands (Skiathos, Skopelos, Alonissos, +25 percent), Lefkada (21 percent), Chios (+19.70 percent), Zakynthos (+16.10 percent), Kavala (+15.40 percent), and Achaia (+13.50 percent).
In tourist areas, there were also double-digit increases. This is the case in Halkidiki (+13.50 percent), the Cyclades (+11.30 percent), and the Dodecanese (+10.70 percent).
Foreign buyers and investors
Despite the annual increases, house prices in Greece are still lower than in other European countries. This factor makes Greek real estate more attractive for foreign buyers, including digital nomads, retirees, people who seek a vacation home, and investors.
The list of foreign investors includes those from Central Europe and the United States of America who focus on properties in the much advertised Cyclades islands and the Dodecanese. Germans are also showing a steady interest in Greek real estate and especially in second homes, with deals for vacation homes on Paros, Rhodes, Patmos, Mykonos, and Tinos having increased by 70 to 80 percent compared to 2021.
The seaside southern suburbs of Athens, the Athens Riviera, are currently the most expensive areas in which to buy property. Palaio Faliro, Alimos, Ellinikon, Glyfada, Voula, and Vouliagmeni are the most sought-after neighborhoods in Attica and will continue to develop in the real estate sector.
One of the most significant construction projects in Europe that will soon materialize is the regeneration of Ellinikon. The construction of the Metropolitan Park is underway in the plot of the former Athens airport. This is a massive project that will include a skyscraper, luxury apartment blocks, a shopping center, parks, restaurants, a casino, and entertainment centers. The project will increase real estate value of surrounding areas.
The tax landscape in Greece is also an important factor in attracting interest from foreign investors. Until the end of 2024, 24 percent VAT is deducted for new construction, while the transfer tax has been limited to 3 percent. Adding brokerage fees, legal fees, notary, and land registry fees, the costs of acquiring a property amount to 7 to 8.5 percent of the purchase price.
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