Despite the climate of uncertainty, The Bank of Greece estimates that tourism, demand combined with investment interest, and low prices compared to pre-crisis levels, maintain positive prospects for the Greek real estate market.

Three parameters which, despite the overall uncertainty, are capable of maintaining a positive outlook for the Greek real estate market, the Bank of Greece analyses in its latest Financial Stability Report.

Specifically, the analysts of the BoG estimate that the apparent positive course of tourism this year, the strong demand along with the high investment interest, but also the great distance that still exists from the historically high levels of real estate prices before the country’s fiscal crisis in the ’00s, are sufficient reasons to maintain the positive outlook for the prospects of domestic real estate.

In fact, the Bank of Greece notes that expectations for the Greek real estate market remain positive, mainly in terms of price developments (with all that this implies for the difficulty of the average household to cover housing needs amid pressure on their incomes) despite the instability of the last two years, as a result of the pandemic and recently the increase in energy costs, construction costs and the impact of the war in Ukraine.

In detail, the BoG analysts note in the report that “on the one hand the emerging very good course of tourism and on the other hand the prospect of mitigating geopolitical instability in a reasonable period of time, maintain the positive medium and long-term expectations which is reflected in the values and the low proportional returns of income property.

Despite the fact that the European Commission’s recommendation to limit the residence permit programs for investors (golden visa or golden passport), may partially affect demand, it is estimated that investment interest will remain strong especially for specific prime locations in the Attica basin and in areas with tourist characteristics”, as noted. Moreover, prices are still far from the historic high recorded before the financial crisis:

Steady price increase from 2018

Based on the apartment price index compiled by the Bank of Greece for the whole country, the highest value of the index was observed in 2008 (101.7), followed by a steady downward trend, reaching its lowest value in 2017 (59). Since then, the apartment price index has been on a steady upward trend, reaching 72.1 in 2021.

Over time, from the country’s fiscal crisis until today, from 2009 to 2017, prices have followed a downward trend, based on data from the BoG, with the worst performance in 2012-2013, when prices fell in double-digit percentage by 11.7% and 10.9%, while in the last four years, from 2018 until today, the trend is upward with the highest rate recorded in 2019, at 7.2%.

After the “belly” due to the pandemic in 2020, the growth rate of apartment prices accelerated in 2021 to 7.1% year-on-year, compared to 4.5% in the immediately preceding year. In fact, especially in the second quarter of 2021, apartment prices for the whole country rose by 9.1% compared to the same quarter in 2020.

Overall for 2021, a higher annual rate of price growth was recorded for newly built apartments compared to old apartments (over five years old), with increases of 7.4% and 6.9%, respectively, while the analysis of the data by geographical area shows that the highest increase for the whole of 2021 was recorded in Athens (9.1%).

Source: news247.gr