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The real estate market in Greece: 2024 forecast

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As we step into the year 2024, the real estate landscape in Greece continues to evolve, presenting both challenges and opportunities for investors, homeowners, and industry stakeholders.

In this article, we will give you a clear picture of what's happening in Greece's real estate scene for the year ahead.

If you need a full and more detailed report, with fresh data and actionable advice, please note that you can get our pack of documents related to the real estate market in Greece. This pack will also give you unlimited access to our team of experts, allowing you to ask them anything related to the housing market in Greece.

How's the Greek economy doing?

Current state

The real estate market in Greece has been influenced significantly by the country's economic and political history.

Greece's economy has seen periods of instability, particularly during the financial crisis that began in 2007. This crisis had a profound impact on the real estate market, causing property values to plummet. However, in recent years, there's been a gradual recovery.

Historically, government policies in Greece have had a notable impact on the housing market.

For instance, during the economic crisis, austerity measures and high taxation affected property ownership and investment. More recently, the government has implemented policies to attract foreign investment. One notable policy is the Golden Visa program, which grants residency to non-EU citizens who invest a certain amount in real estate.

This has attracted many foreign investors, particularly from China, Russia, and the Middle East.

As for the current state of the real estate market, it's becoming increasingly attractive to investors. Greece offers a unique combination of cultural heritage, beautiful landscapes, and a favorable climate, making it a popular destination for both tourism and real estate investment.

The market is recovering, with increasing demand for properties, especially in tourist areas like Athens, Mykonos, and Santorini.

These areas are highly sought after for their luxury villas and apartments with scenic views.

The types of properties that attract the most interest vary. In urban areas like Athens, there's a demand for apartments, both for personal use and for short-term rentals due to tourism.

In contrast, the islands and coastal areas see a higher demand for vacation homes and luxury properties.

For foreign investors, there are specific incentives and drawbacks to consider. The aforementioned Golden Visa program is a significant incentive, offering a path to residency. However, investors should be cautious about bureaucratic hurdles and sometimes complex legal procedures.

The Greek real estate market can be less transparent compared to some other European countries, so it's advisable to work with reputable local real estate agents and legal advisors.

When comparing real estate prices in Greece to neighboring or similar countries, Greece often presents more affordable options, especially when compared to other Southern European countries like Italy or Spain.

This affordability, combined with the country's natural and historical appeal, makes it an attractive option for investment.

The legal framework surrounding real estate investment in Greece has been improving in terms of stability and transparency.

Efforts have been made to streamline property transactions and reduce bureaucracy, but it's still advisable to approach these transactions with thorough research and professional guidance.

Outlook and forecast

Greece's real estate market does have unique factors that set it apart.

Its rich history, cultural heritage, and stunning landscapes, combined with a relatively lower cost of living compared to other European destinations, make it a unique investment landscape.

Additionally, the prevalence of historical and archaeological sites adds a layer of complexity to property development and can sometimes limit construction in certain areas.

Forecasting the country’s economic and stability trajectory, based on historical trends and recent developments, leans towards a cautiously optimistic outlook.

Greece has been showing signs of recovery from its decade-long financial crisis. The tourism sector, a vital part of the economy, has been rebounding, which positively affects the real estate market, especially in tourist-heavy regions.

Regarding regions experiencing the fastest growth, Athens, Thessaloniki, and popular island destinations like Crete, Mykonos, and Santorini are seeing significant real estate activity. Athens, in particular, is a hotspot due to its urban amenities and historical significance.

In contrast, lesser-known areas like the Peloponnese and central Greece are gaining interest for their more affordable prices and scenic beauty.

When comparing Greece’s economic forecast with its regional neighbors or competitors, it shows a promising trend, especially in the context of real estate.

Countries like Italy and Spain, which have similar appeals, are more expensive, making Greece a more attractive option for investors looking for affordability and growth potential.

Regarding anticipated changes in government policies in 2024, there are no specific known policy changes at this point.

However, investors should stay informed about potential tax reforms or changes in the Golden Visa program, which could impact investment decisions.

Some specific facts that suggest improvements in Greece include the increasing foreign direct investment, especially in the real estate sector, improvements in the country's credit rating, and a growing interest in renewable energy projects.

These factors contribute to a more stable and attractive investment environment, which in turn positively impacts the real estate market by increasing demand and potentially property values.

However, potential risks should not be overlooked.

Economic instability in the Eurozone, potential political shifts, and bureaucratic challenges in property transactions remain risks. Additionally, natural risks like earthquakes, which are prevalent in the region, should be considered.

If these risks materialize, they could lead to decreased investor confidence and a slowdown in the real estate market.

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What about housing prices in Greece?

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Current state

Over the past few years, Greece's real estate prices have exhibited a recovering trend.

This recovery follows a significant downturn that occurred during the financial crisis starting in 2007, where property values saw substantial declines.

During this period, the real estate market experienced a severe slump due to economic instability, austerity measures, and decreased domestic and foreign investment. However, in recent years, there has been a gradual and steady increase in prices, signaling a rebound.

Comparing current real estate prices to those a decade ago, there's a noticeable difference.

Prices a decade ago were significantly higher prior to the financial crisis. The crisis led to a sharp decline in property values, and only in recent years have they started to recover. As of now, the prices are rising, although they have not yet reached the pre-crisis levels.

This increase can be attributed to improved economic conditions, increased foreign investment, and growing interest in Greek real estate, particularly from non-European investors.

The regions experiencing the highest growth in real estate prices are primarily urban areas and popular tourist destinations. Athens, Thessaloniki, and islands like Mykonos and Santorini are witnessing significant increases. The reasons are multifaceted: Athens, as the capital, attracts both investors and individuals seeking homes due to its urban amenities, historical significance, and improved infrastructure.

Islands like Mykonos and Santorini, known for their tourism appeal, attract investment in vacation homes and rental properties.

The comparison between urban and rural real estate prices shows a considerable difference. Urban areas, especially in cities like Athens and Thessaloniki, tend to have higher property prices due to higher demand, better infrastructure, and more employment opportunities.

Rural areas, while offering more affordable options, have lower demand and are often seen as less attractive for investment, except for specific rural areas that have tourist appeal.

The specific facts driving these trends are diverse. Economic recovery post-crisis has been a significant factor, leading to increased confidence in the real estate market. The introduction of programs like the Golden Visa has attracted foreign investors, especially from China, Russia, and the Middle East, boosting demand and prices in the process. Tourism growth has also played a critical role, especially in islands and coastal areas, where there's high demand for vacation homes and rental properties.

Additionally, urbanization trends, with more people moving to cities for better job prospects and lifestyle, have contributed to higher urban real estate prices.

Outlook and forecast

The current state of real estate prices in Greece is influenced by several economic and demographic factors.

Firstly, the overall economic recovery from the previous decade's financial crisis plays a critical role. As the economy stabilizes and grows, consumer confidence increases, leading to greater demand in the housing market.

Secondly, the demographic trend of urbanization, where more people are moving to cities in search of better job opportunities and amenities, is pushing up real estate prices in urban areas.

Another influential factor is the influx of foreign investment, particularly through programs like the Golden Visa, which grants residency to non-EU investors in real estate.

This has led to increased demand, especially in tourist-favored areas and major cities. Additionally, the growing tourism industry in Greece, with a steady increase in tourist arrivals, boosts the demand for short-term rental properties, impacting prices, particularly in popular destinations.

Looking at specific factors that could lead to an increase in housing prices in the near future, one key aspect is the continued growth in tourism. Areas like the Greek islands and Athens, which are major tourist hotspots, are likely to see increased demand for housing, driving up prices.

Also, if the economy continues to stabilize and grow, consumer confidence will rise, leading to more domestic buyers entering the market.

Furthermore, ongoing urban development and infrastructure projects, especially in major cities, can make these areas more attractive to both domestic and foreign buyers, potentially increasing demand and prices.

The continuation and expansion of residency programs for foreign investors can also contribute to higher prices in the real estate market.

On the contrary, there are also factors that could lead to a decrease in housing prices. For instance, any significant economic downturn or political instability in Greece or the broader Eurozone could negatively impact investor confidence and reduce demand in the real estate market.

Another factor could be changes in foreign investment policies, such as alterations to the Golden Visa program, which could diminish the attractiveness of the Greek real estate market to non-EU investors.

Environmental factors, such as natural disasters or rising concerns about climate change, especially in coastal areas, could also impact property values.

Additionally, if there is an oversupply of housing, particularly in areas that have seen rapid development, this could lead to a decrease in prices.

It's important to note that these trends and events will not impact all regions equally. Urban areas and popular tourist destinations are more likely to experience price increases due to higher demand, while rural or less popular areas might not see the same level of growth.

Similarly, any decrease in prices due to negative economic or political events is likely to have a more pronounced effect in areas that are heavily reliant on foreign investment or tourism.

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How's the demand for the real estate market in Greece?

Current state

The current demand for residential real estate in Greece shows a trend of recovery and growth, particularly in urban areas and popular tourist destinations.

This demand is largely driven by the improved economic climate, increased foreign investment, and the growing interest in Greece as a tourist destination. In terms of the balance between buyers and sellers, it varies by region. In high-demand areas like Athens, Thessaloniki, and popular islands, there's often more demand than supply, leading to competitive markets.

In contrast, in rural or less popular areas, the market might be more balanced or even have more sellers than buyers.

The supply of new housing is an important factor in meeting this demand. In urban areas and tourist hotspots, there's significant development underway to cater to the growing demand.

However, the supply may still lag behind, especially for properties that meet the specific preferences of buyers, such as modern amenities, good locations, and attractive views. In rural areas, the supply of new housing is less, partly due to lower demand and partly due to economic factors that make large-scale development less feasible.

Regarding the type of properties buyers are looking for, there's a diverse range.

In cities, there's a high demand for apartments, particularly those that are well-located, modern, and have good connectivity to amenities and public transport. For the tourist market, properties like villas, holiday homes, and properties suitable for short-term rentals in areas with high tourist footfall are in demand.

Additionally, there's a niche but growing interest in properties that offer eco-friendly features or traditional Greek architecture with modern conveniences.

The current interest rates for mortgages play a significant role in the real estate market. Higher interest rates can reduce buying power, making it more challenging for consumers to afford new homes. Conversely, lower interest rates can stimulate the market by making mortgages more affordable.

The exact rate can vary based on various factors, including the economic policy of the Greek government and the European Central Bank's monetary policy. Generally, in a recovering economy like Greece's, interest rates are managed to encourage investment and consumer spending, which can positively impact the real estate market.

Recent changes in government policies or regulations can have a significant impact on the real estate market.

Changes in tax laws, such as property taxes or capital gains taxes, can influence the attractiveness of real estate investment. Subsidies for homebuyers or incentives for first-time buyers can stimulate the market by making it easier for people to purchase homes. Additionally, zoning laws can affect where and how new properties can be developed, influencing the supply of new housing.

For example, regulations that make it easier to convert existing buildings into residential properties can increase the housing supply in urban areas.

Outlook and forecast

In Greece, demographic shifts are significantly influencing the demand in the real estate market.

The aging population is leading to an increased demand for properties that cater to the needs of older individuals. This often includes smaller, more manageable homes, such as apartments or bungalows, which are easier to maintain. These properties are particularly sought after in urban areas where healthcare and other essential services are more readily available.

Urbanization is another major factor.

As more people move to cities in search of employment and a better lifestyle, the demand for urban housing increases. This is most evident in Athens and Thessaloniki, where there's a strong demand for apartments, especially those that are well-connected to the city center and amenities.

This urban shift often results in a decline in demand for rural properties, affecting prices and availability in those regions.

Current trends in household formation show a leaning towards smaller household sizes. This influences the demand for smaller living spaces, such as one or two-bedroom apartments. Young professionals and smaller families are looking for practical and affordable living solutions, which drives demand in this segment of the market.

In terms of real estate as an investment, there's a clear trend towards purchasing properties for rental purposes, especially in tourist-heavy areas.

The demand is high for properties that can be used as vacation rentals, such as villas or apartments in popular tourist destinations like the Greek islands. Investors are attracted to these areas due to the potential for high rental yields driven by the strong tourism sector.

Cultural trends also impact the housing market.

There's a growing interest in properties that blend traditional Greek architectural elements with modern amenities.

This trend favors the renovation of older, characterful properties in both urban and rural settings, appealing to both domestic buyers and foreign investors who value the unique charm of Greek architecture.

The real estate market in Greece is seeing a mix of buyers purchasing properties for investment purposes and those buying for personal use.

The trend towards buying property as an investment has been bolstered by the growth in tourism and the popularity of short-term rental platforms like Airbnb.

Foreign investment plays a significant role in the Greek real estate market. Programs such as the Golden Visa, which offers residency to non-EU investors in real estate, have attracted a substantial amount of foreign capital. This investment tends to focus on luxury properties, apartments in prime urban locations, and holiday homes in tourist areas, driving demand in these segments.

Regarding restrictions and encouragements for foreign investors, the Golden Visa program is a major incentive, attracting investors looking for residency options in Europe.

However, foreign investors also face challenges such as navigating the Greek property laws and potential language barriers, which can slow down the investment process.

Lastly, niche markets like luxury properties and eco-friendly homes are experiencing unique trends in Greece. The luxury property market, particularly in areas like Mykonos, Santorini, and parts of Athens, is thriving due to high demand from affluent buyers and investors.

The market for eco-friendly homes is also growing, albeit from a smaller base, reflecting a global trend towards sustainability.

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How's the rental market in Greece?

Current state

The demand for rental properties in Greece reflects the country's economic, demographic, and cultural dynamics.

In recent years, there's been a noticeable increase in demand, particularly in urban and tourist-heavy areas.

In terms of specific types of properties, apartments, particularly in urban areas, are in high demand. This demand is driven by a combination of factors, including the urbanization trend, the influx of young professionals moving to cities for work, and a growing preference for living in more centrally located areas. In tourist destinations, there's also a high demand for short-term rental properties, such as holiday apartments or villas.

The features most sought after by tenants vary based on location and demographics.

In urban areas like Athens and Thessaloniki, tenants typically prioritize location, preferring properties close to work, public transportation, and amenities.

Size and modern amenities are also important, with a preference for well-maintained and contemporary living spaces. In contrast, in suburban and rural areas, tenants may prioritize larger living spaces, natural surroundings, and perhaps lower rental costs. These areas might attract families or individuals looking for a quieter lifestyle away from the bustle of the city.

Tenant preferences also differ based on demographic characteristics. Young professionals and students, for instance, who are a significant demographic in cities, tend to prefer apartments that are affordable, conveniently located, and require minimal maintenance.

In university towns, there's a high demand for shared accommodations or smaller apartments that cater to student budgets and lifestyles.

For families, which are more common in suburban and some urban areas, the preference often shifts towards larger apartments or single-family homes with more space and access to schools and family-friendly amenities.

In rural areas, where the pace of life is slower and the cost of living is often lower, tenants might prefer larger properties that offer more space and a connection to nature.

Income levels and economic factors significantly influence rental choices. In more affluent areas, there's a demand for high-end apartments or houses with luxury amenities. In contrast, in regions with lower average income, there's a higher demand for more affordable housing options.

Economic factors like employment opportunities and the cost of living play a crucial role in determining where different demographic groups choose to live and what type of properties they rent.

Certain regions in Greece have a high concentration of specific tenant groups. University cities like Thessaloniki have a significant number of students renting properties. Tourist destinations like Mykonos and Santorini attract short-term tenants, including tourists and seasonal workers.

Athens, being the capital and economic hub, attracts a diverse tenant base, including young professionals, students, and expatriates.

Outlook and forecast

The rental market in Greece is influenced by a variety of factors, with evolving lifestyles and work patterns playing a significant role.

The rise of remote work, for instance, has led to a shift in rental preferences. People are increasingly seeking properties with dedicated workspaces and high-speed internet connectivity. This trend is more pronounced in cities like Athens and Thessaloniki, where the influx of digital nomads and remote workers has been notable.

These cities offer the urban amenities that appeal to this demographic, leading to a higher demand for rentals in well-connected neighborhoods.

Demographic changes are also shaping the rental market. For example, some regions are experiencing aging populations, while others see an influx of younger residents.

In areas like Crete and the Peloponnese, there's a growing number of retirees from other European countries, attracted by the climate and lifestyle. This has boosted demand for long-term rentals, particularly in communities that offer healthcare and social amenities suitable for older residents.

Emerging urban areas are indeed becoming new hotspots.

Cities like Patras and Ioannina, traditionally less prominent than Athens or Thessaloniki, are gaining traction due to their improving infrastructure, educational institutions, and cultural offerings. Rentals in these areas are increasingly sought after by students, young professionals, and families looking for a balance between urban living and affordability.

Technological advancements are also influencing the rental market. The use of online platforms for finding and leasing properties has streamlined the process, making it easier for both landlords and tenants.

Smart home technologies are becoming more prevalent, with renters showing a preference for properties that offer smart security systems, energy-efficient appliances, and automated controls.

Sustainability and green living trends are increasingly relevant.

There's a growing demand for properties with energy-efficient features, renewable energy sources, and sustainable materials. This shift is more noticeable in urban areas and amongst younger renters who prioritize environmental considerations.

The rental market forecast varies across different regions. In tourist-heavy areas like the Greek Islands, short-term rentals remain dominant, buoyed by the consistent flow of tourists.

In contrast, mainland cities are seeing a steady demand for long-term rentals driven by domestic migration and the growing expatriate community.

Long-term, the rental market in Greece is poised for evolution, shaped by these diverse factors.

Urban areas will likely continue to attract a mix of long-term residents and transient populations like students and remote workers. In contrast, rural and coastal areas might see more fluctuation, tied to tourism trends and the preferences of retirees.

Within the country, niche markets are also emerging.

Luxury properties in exclusive areas like Mykonos and Santorini cater to high-end renters. Similarly, there's a niche market for eco-friendly homes, particularly in regions where environmental consciousness is higher.

These properties often feature sustainable design, renewable energy sources, and organic gardens, appealing to a specific segment of the rental market.

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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.