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The real estate market in Thessaloniki: 2024 forecast

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As we step into the year 2024, the real estate landscape in Thessaloniki 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 Thessaloniki'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 property pack for 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 Thessaloniki specifically.

How's the Greek economy doing?

Current state

The real estate market in Thessaloniki, Greece, reflects the broader economic and political trends of the country.

Greece's economy has experienced significant turbulence in the past few decades, with a severe debt crisis in the early 2010s leading to austerity measures and economic restructuring. This had a profound impact on the real estate sector, causing a downturn in property values and investment.

However, in recent years, the economy has shown signs of recovery, albeit at a gradual pace.

In Thessaloniki, the real estate market mirrors this national trend. During the economic crisis, the housing market was sluggish, with falling prices and low demand.

Many properties were left unsold or were sold at significantly reduced prices. This period was tough for homeowners but presented opportunities for buyers, particularly foreign investors looking for lower-priced properties.

Government policies have played a key role in shaping the real estate landscape. Historically, Greek property law was complex and often seen as unfriendly to foreign investment.

However, in an effort to stimulate the market, the government has introduced several incentives.

One notable policy is the Golden Visa program, which offers residency permits to non-EU citizens investing in Greek real estate above a certain threshold. This has attracted a fair amount of foreign investment, particularly in areas like Thessaloniki.

More recently, there have been efforts to streamline property laws and reduce bureaucracy, making it easier to buy and sell property.

This, coupled with an improving economy, has led to a renewed interest in the real estate market in Thessaloniki. The city, known for its rich history and cultural significance, is increasingly seen as an attractive location for investment.

Locally, Thessaloniki's real estate market has specific areas of interest. The waterfront and city center are particularly sought after, thanks to their proximity to key attractions and amenities.

There's also a growing interest in suburban areas, offering more space and tranquility while still being accessible to the city.

For foreign investors, the incentives include the potential for residency through property investment and the relative affordability of properties compared to other European destinations.

However, challenges remain, such as navigating the legal system and potential language barriers. The Greek real estate market, while recovering, is still marked by some instability and unpredictability, which can be a deterrent.

Comparatively, real estate prices in Thessaloniki are generally lower than in Athens, the capital city, but higher than in some neighboring Balkan countries.

The legal framework around real estate investment has improved in terms of transparency and efficiency, but it's advisable for investors to seek local legal counsel to navigate the specifics.

Outlook and forecast

Thessaloniki's real estate market does have unique factors distinguishing it from other markets.

Its rich cultural history, strategic geographic location as a gateway to the Balkans, and its status as Greece's second-largest city make it an appealing destination for both residential and commercial investments.

Unlike Athens, which is the political and economic center, Thessaloniki offers a blend of cultural heritage and modern living, which is attractive to a diverse range of investors and residents.

When estimating a forecast for Thessaloniki's economy and stability, and consequently its real estate market, several factors come into play. The city has been experiencing a gradual recovery, parallel to the national economic recovery.

The presence of universities and a younger demographic contributes to a dynamic atmosphere that can spur economic growth.

Additionally, Thessaloniki's port is a significant asset, serving as a commercial hub for Southeast Europe. These factors suggest a cautiously optimistic forecast for the city's economy and real estate market, with potential for growth, especially if global economic conditions remain stable.

In terms of growth compared to other regions or cities in Greece, Thessaloniki has the potential to grow at a faster rate due to its unique position and untapped potential. The city could benefit from increased domestic and foreign investment, driven by its cultural and economic appeal.

Regarding government policies, there were no specific anticipated changes for 2024 directly impacting Thessaloniki's real estate market.

However, investors should stay informed about national policies, such as taxation changes or further improvements in the legal framework surrounding property investment, as these could indirectly influence the market in Thessaloniki.

Specific factors suggesting improvements in Thessaloniki include ongoing urban regeneration projects, investment in infrastructure, and the modernization of the port. These developments could increase the city's attractiveness for both residential and commercial real estate investment.

For instance, improved infrastructure can make certain areas more accessible and desirable, potentially driving up property values.

However, potential risks should not be overlooked. Economic instability in Greece or the broader Eurozone could impact Thessaloniki's market.

Additionally, the bureaucratic challenges in property transactions, although improving, still pose a risk. Political changes or shifts in national economic policy could also affect investor confidence.

If these risks materialize, the real estate market in Thessaloniki could experience volatility. Economic instability could lead to decreased investment and falling property values, while bureaucratic challenges could slow down the market and deter foreign investment.

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What about housing prices in Thessaloniki?

If you want to know the last prices, rents and yields in Thessaloniki, we have prepared everything you need in our property pack for Greece.

Current state

In Thessaloniki, the trend in real estate prices over the past few years reflects the city's economic recovery and growing appeal.

Following the severe Greek economic crisis that began around 2009, real estate prices in Thessaloniki, like much of Greece, experienced a significant downturn. During the height of the crisis, property values plummeted as demand decreased, credit became scarce, and overall economic uncertainty prevailed.

However, in the years following the worst of the crisis, there has been a gradual but noticeable recovery in the real estate market. As the Greek economy started to stabilize and grow, albeit slowly, so did the real estate prices in Thessaloniki.

This recovery was not immediate or uniform across all property types, but by the early 2020s, there was a clear upward trend in property values.

Comparing current real estate prices with those from a decade ago provides an interesting perspective. A decade ago, the market was in the midst of a significant downturn. Prices were much lower than they are today. Since then, prices have been rising, particularly in the past few years.

This increase is attributed to improved economic conditions, increased foreign investment (partly due to programs like the Golden Visa), and a growing interest in Thessaloniki as a cultural and business hub.

Currently, the prices are generally rising, although the rate of increase varies by property type and location. The types of properties experiencing the highest growth in real estate prices include residential properties in prime locations (such as the city center and waterfront areas) and properties suitable for tourism-related ventures.

This growth is driven by the city's growing appeal as a tourist destination, its cultural significance, and the overall improvement in the Greek economy.

The population dynamics in Thessaloniki have also influenced real estate trends. The city has seen changes in its population, including an influx of younger people and international residents, partly due to its educational institutions and economic opportunities.

This demographic shift impacts the types of properties in demand, with a growing preference for modern, well-located residential units.

Specific factors contributing to these trends include the city's economic recovery, increased foreign investment, urban redevelopment projects, and Thessaloniki's strategic position as a commercial and cultural hub in the region.

The improved economic outlook, coupled with policy initiatives aimed at encouraging investment, has played a crucial role in shaping the real estate market.

Outlook and forecast

The current state of real estate prices in Thessaloniki is influenced by a mix of economic and demographic factors.

Thessaloniki, with its rich history and cultural appeal, has seen a rise in tourism. This growth boosts demand for short-term rentals and properties suitable for tourism-related businesses, pushing up prices in these segments.

Programs like the Golden Visa have attracted foreign buyers, particularly in the higher-end market. This influx of foreign capital can drive up property values, especially in desirable areas.

Post-crisis economic stability and growth in Greece positively affect real estate prices. As the economy improves, so does the purchasing power and confidence of potential buyers.

A trend towards urbanization, with more people moving to cities like Thessaloniki for employment and education opportunities, increases demand for urban housing.

Younger demographics and changing lifestyles favor modern, well-located residential properties, impacting prices in these areas.

If Greece's economy continues to recover and stabilize, it could lead to increased confidence and purchasing power, pushing up housing prices.

Any significant infrastructure projects, such as improvements in transportation or public services, can make certain areas more desirable, potentially increasing property values in those areas.

If Thessaloniki continues to develop as a cultural and tourist hub, demand for properties in prime locations could drive up prices.

These trends might not uniformly affect other cities or regions in Greece, as each area has its unique economic and demographic dynamics.

Any resurgence of economic instability in Greece or the Eurozone could lead to a decrease in property values. This could be due to reduced investment, higher interest rates, or decreased buyer confidence.

If new housing supply significantly outpaces demand, it could lead to a decrease in prices. This might happen if there is too much construction based on speculative demand, especially in non-prime areas.

Changes in population, such as a decline in population or shifts in demographic profiles, could affect housing demand and prices.

Again, these factors might not impact all cities and regions in Greece uniformly. Some areas might be more resilient to economic downturns, while others could be more vulnerable to demographic shifts.

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

Current state

The current demand for residential real estate in Thessaloniki is shaped by various factors, including economic conditions, demographic trends, and government policies.

As of now, there's a healthy demand for residential properties in Thessaloniki, driven partly by the city's appeal as a cultural and educational hub, and partly by the improving economic conditions in Greece.

This demand comes from both local buyers and foreign investors, the latter attracted by programs like the Golden Visa.

In terms of the balance between buyers and sellers, it varies depending on the type and location of the property. For prime locations in the city, especially those appealing to tourists or near major amenities, the demand often exceeds supply, leading to a seller's market.

In contrast, in less central or less developed areas, there might be an equilibrium or even a surplus of properties, creating a buyer's market.

Regarding the supply of new housing, there has been an increase in development to meet the growing demand, particularly in sought-after areas.

However, this supply sometimes struggles to keep pace with the specific demands of buyers, both in terms of quantity and the type of housing.

Buyers in Thessaloniki are looking for a range of properties. There's demand for modern apartments in the city center, catering to young professionals and investors looking for rental properties.

Families often seek larger homes or properties in suburban areas with more space and amenities. Properties with historical value or unique architectural features are also in demand, reflecting the city's rich cultural heritage.

Interest rates for mortgages are a critical factor affecting buying power and demand. Historically, Greece has seen relatively high mortgage rates, especially during and after the economic crisis.

The level of these rates can significantly influence the affordability of properties and the willingness of consumers to enter the market. Lower rates tend to stimulate demand, as buying becomes more affordable, while higher rates can dampen it.

Recent changes in government policies or regulations can also have a significant impact on the local real estate market. Over the past few years, the Greek government has implemented several measures to stimulate the real estate market - like the Golden Visa program, which offers residency to non-EU investors.

Additionally, there have been efforts to simplify the property buying process and reduce bureaucracy, which can make the market more attractive to both domestic and foreign buyers.

However, any recent changes specific to 2024 would require up-to-date information which I do not have access to.

Outlook and forecast

Demographic shifts, such as aging populations and urbanization, play a significant role in shaping the demand in Thessaloniki's real estate market.

With an aging population, there's an increased demand for properties that cater to the needs of older residents. This includes homes that are more accessible, possibly smaller and easier to maintain, and closer to healthcare facilities and community services. Such properties are becoming more sought after, reflecting the needs of this demographic.

Urbanization, on the other hand, is drawing more people into Thessaloniki, especially younger individuals and families. This trend increases the demand for residential properties in the city, particularly in areas that offer employment opportunities, educational institutions, and lifestyle amenities.

As a result, there's a growing demand for modern apartments and family homes within the city and its suburbs.

Current trends in household formation also influence the types of properties in demand. There's a noticeable trend towards smaller household sizes - either single individuals or couples without children.

This shift leads to a higher demand for smaller apartments or studio flats, especially in urban areas where such demographics tend to live due to work or education.

Regarding real estate as an investment in Thessaloniki, there's a noticeable trend towards purchasing properties for rental purposes, especially given Thessaloniki's growing popularity as a tourist destination.

Properties in central locations, near tourist attractions, or those suitable for short-term rentals are particularly desirable. This trend is partly driven by the rise of platforms like Airbnb, which have made it easier for property owners to rent out their properties for short periods.

Cultural trends also influence the demand for certain types of properties. For instance, there's a growing interest in properties with historical or cultural significance, reflecting a broader interest in heritage and authenticity. This trend favors properties in the historic center of Thessaloniki or those with unique architectural features.

The role of foreign investment in Thessaloniki's real estate market is significant. Foreign buyers, attracted by programs like the Golden Visa, often look for high-end properties or those in prime locations.

This creates more demand for luxury apartments, villas, and properties with unique selling points like sea views or historical significance.

Regarding restrictions and encouragements for foreign investors, policies like the Golden Visa have been a major encouragement, leading to increased foreign investment in the real estate market. This influx of foreign capital tends to boost demand for certain types of properties, particularly in the higher-end segment.

Finally, niche markets like luxury properties or eco-friendly homes are experiencing unique trends in Thessaloniki.

The luxury market, catering to affluent buyers (often from abroad), remains robust, with high demand for properties in exclusive areas or with unique features.

Eco-friendly homes, although a smaller niche, are gaining attention due to growing environmental awareness, leading to a demand for properties built with sustainable practices or offering green amenities.

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How's the rental market in Thessaloniki?

Current state

The current demand for rental properties in Thessaloniki is shaped by various factors, including the city's demographics, economic conditions, and cultural appeal.

Particularly in urban areas, there's a high demand for apartments. This is due to the influx of students, young professionals, and small families who prefer living near city centers where they can access amenities, employment opportunities, and educational institutions.

In suburban areas, single-family homes are more in demand, especially among families looking for more space, peace, and access to schools and family-oriented amenities.

Shared accommodations, like co-living spaces, are popular among students and young professionals, mainly due to their affordability and the opportunity for social interactions.

A prime location is highly valued, particularly properties close to public transport, shopping areas, and other essential services.

The size and layout of the property matter, with preferences varying based on family size and lifestyle. For instance, families might prefer larger spaces with multiple bedrooms.

Modern amenities like high-speed internet, a well-equipped kitchen, and air conditioning are often sought after, especially by younger tenants and professionals.

In urban parts of Thessaloniki, tenants often prioritize location and convenience over size. They tend to be students, young professionals, or small families. Apartments close to universities, nightlife, and public transport are particularly popular.

Tenants in suburban areas usually look for more space, tranquility, and family-oriented amenities. The demographic here leans towards families or older couples.

In rural areas, demand is generally lower, but those who rent here may prioritize larger properties, often seeking a connection with nature or a more peaceful lifestyle.

Concentrated in urban areas, especially near universities. They generally prefer affordable, shared accommodations.

Also favor urban areas. They might opt for modern apartments with convenient access to work and leisure activities.

More likely to be found in quieter, suburban or rural areas, often preferring smaller, easily manageable properties. Tend to rent larger or more luxurious properties, often in prime urban locations or desirable suburbs.

More likely to rent smaller apartments or shared accommodations, with affordability being a key concern.

Near universities, you'll find higher concentrations of student housing and shared accommodations. Tend to cluster in vibrant urban neighborhoods with easy access to nightlife, cafes, and cultural activities.

Often favor quieter suburban neighborhoods or scenic rural areas offering a more relaxed lifestyle.

Outlook and forecast

The rental market in Thessaloniki is influenced by a variety of factors, each playing a distinct role in shaping its dynamics.

Thessaloniki's growing popularity as a tourist destination has a significant impact on the rental market. Properties in central locations or near tourist attractions are in high demand, especially for short-term rentals.

The presence of universities in Thessaloniki attracts a large number of students, who form a substantial portion of the rental market. This leads to a consistent demand for affordable, smaller rentals close to university campuses.

The overall economic health of the city influences the rental market. Improved economic conditions lead to higher disposable incomes, which can increase demand for quality rental properties.

The rise of remote work could lead to a shift in rental preferences. People might prioritize larger spaces or properties with dedicated work areas. There could be a trend towards renting in quieter, more spacious suburban areas, as the need to commute decreases.

This shift could also see a rise in demand for properties with high-speed internet and areas conducive to home offices.

Thessaloniki is experiencing demographic changes, such as an influx of young professionals and a growing expatriate community. This change is reflected in the rental market, with increased demand for modern, well-located apartments that cater to the lifestyle and convenience sought by these groups.

The aging population may lead to higher demand for smaller, more accessible rental properties. Areas undergoing urban regeneration or development are emerging as new hotspots for rental properties.

These areas, often revitalized with new amenities and improved infrastructure, become attractive for renters looking for modern living spaces.

Technological advancements are making the rental process more efficient. Online platforms for property listings, virtual tours, and digital contract signing are becoming more prevalent, enhancing the ease of renting.

Smart home technology is increasingly sought after, with tenants valuing properties that offer smart security systems, energy-efficient appliances, and home automation.

There's a growing interest in sustainability, leading to a demand for eco-friendly rental properties. This includes properties with energy-efficient features, green spaces, and environmentally friendly building materials.

This trend is more pronounced among younger renters, who are more environmentally conscious.

The rental market forecast varies across Greece. In major cities like Athens and Thessaloniki, the demand remains strong, especially in central and urban areas.

In contrast, more rural or less developed regions might not see the same level of demand, with the market being influenced more by local economic and demographic factors.

Considering these factors, the long-term outlook for Thessaloniki's rental market appears positive. The city's appeal as a tourist destination, educational hub, and its evolving economic landscape bode well for sustained rental demand.

The market is likely to see diversification, with increased demand for properties that cater to remote workers, eco-conscious tenants, and an aging population.

Luxury rentals in Thessaloniki are experiencing a unique trend, with high demand from foreign visitors and expatriates looking for high-end accommodations.

Eco-friendly homes are another niche market on the rise, appealing to a segment of renters who prioritize sustainability and green living.

Make sure you understand the real estate market in Thessaloniki

Don't rush into buying the wrong property in Greece. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

real estate market Thessaloniki

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.