In nadir investment in housing in the EU, in zenith in Greece

The strict loan conditions and the doubtful future of when to stop the constant increases in interest rates led Europeans to a 46% reduction in 2023 compared to 2022. A different picture is observed in Greece, where investors’ interest in residentialism is particularly intense, which is largely due to the Golden Visa. As Deloitte’s research features, foreign direct investment in 2023 is estimated to have increased by about 40% compared to 2022, as real estate returns, although moving low, remain particularly attractive for investors mainly from abroad. “Live” is also the domestic interest in housing, as many are the Greeks who want to invest in a more quality home to improve their standard of living. However, the ever-increasing prices, the reduction in the purchasing power of Greek households and high borrowing rates, make up an unsolved “equation” for many households that may wish to acquire their own property. Even if in 2024 the rate of rising prices is milder, the difficulties will remain. Already, according to the latest data from the Bank of Greece, prices now reach the record recorded in early 2008. In particular, prices increased by 11.8% in the fourth quarter of 2023, at a nationwide level, while total growth reached 13.4% throughout the year, while in 2022 housing prices had increased by 11.9%. At European level, investment in housing declined dramatically in the Nordic countries by 70%, in France by 60%, in the Netherlands by 38%, in Spain 29%, in Germany 28%, while the United Kingdom fell by 17%. This fall may cause further price adjustments in some countries. However, investors still have a strong interest in the housing category, as shown by some office-to-house conversion transactions. The reason for this growing interest in housing is the boom of rent growth. At the same time, there is a sharp drop in the possibility of purchasing housing, as both interest rates on housing loans and prices have increased. In addition, there are serious housing shortages and old age in large cities. As the BNP Paribas Real Estate report says, housing prices in Europe decreased by 1% in the third quarter of 2023 compared to the corresponding period of 2022. The most affected countries were Luxembourg (-13.6%), Germany (-10.2%), Finland (-7.0%), Sweden (-4.4%), the Netherlands and Slovakia (-3.8%). The fall is even greater than the peak of the last two years. The constant increase in housing prices, inflation and interest rates on housing loans, as well as the decrease in real disposable household income, are the main factors behind the sharp fall in housing market capacity and therefore the continued decline in housing prices in Europe. The price index for income reached a historic high in Europe in the second quarter of last year and remains very high in many countries. At city level, our accessibility indicator shows that all markets (except Rome and Seville) are overpriced or significantly overpriced. Therefore, in the third quarter of 2023, housing prices decreased to 17 out of 28 cities compared to last year and 25 cities since the peak of the last two years. House prices fell by over 5% in Frankfurt (-13.5%), Munich (-12.9%), Amsterdam (-12.8%), Rotterdam (-8.1%), Hamburg (-7.1%), Lyon (-6.7%) and Paris (-5.3%). Southern European cities are also the most resilient, as housing prices have not yet been adjusted and continue to increase. However, the trend could be slightly reversed by the end of the year.