Record Highs in Greek Real Estate Prices – Where Are the Increases Coming From?

The year 2024 marked a milestone for Greece’s real estate market. Property values have fully recovered and reached decade-high levels. In fact, in the most commercial areas of the country, prices have surpassed those of 2008 after a continuous seven-year upward trend. The country’s economic growth, foreign investments, tourism performance, and the expansion of the sharing economy significantly contributed to this rise. According to Eurostat data for Q2 2024, Greece recorded the sixth-highest annual increase in residential property prices in the EU at 9.2%. This sustained increase is mainly attributed to demand from abroad. Data from the Bank of Greece shows that out of €2.1 billion in foreign direct investments in the first half of 2024, 54.2% (€1.14 billion) was spent on real estate purchases. Acquiring property in Greece is considered a safe and profitable investment, boosting external demand. CPS Research Department and Spitogatos.gr indicate that 15% of online property searches originate from abroad, with the highest demand being for Attica, particularly central Athens and its southern suburbs (40.6%), followed by Thessaloniki (15.3%) and Halkidiki (10.6%). Countries showing the most interest include the USA, Germany, the UK, Australia, Serbia, Canada, Bulgaria, France, Ireland, and Poland. Most potential foreign buyers have budgets ranging from €250,000 to €600,000, while the average price of a new seaside property or one with sea views ranges between €300,000–€350,000. Southern Crete, the Ionian Islands, and the Preveza area attracted significant investment interest in 2024. Recent government regulations limiting short-term rentals in central Athens and increasing thresholds for acquiring properties through the Golden Visa program may negatively impact the market. However, the ECB’s monetary policy relaxation, reduced inflation, and improved macroeconomic conditions are expected to restore external demand. Housing remains a major challenge for Greek households as current prices are disproportionate to their incomes. Housing costs account for 35.2% of disposable income compared to 19.7% in the EU. Additionally, 28.5% of the Greek population lives in households where housing expenses exceed 40% of disposable income, versus only 8.9% in the EU. While 71% of potential buyers have budgets between €50,000 and €200,000, 69.5% will need bank loans to complete purchases. However, 64.5% find loan access difficult and 75% believe interest rates are high. The strict credit policy and increased interest rates limit demand, reducing the capacity of potential Greek buyers. Another issue is the limited availability of homes. Thousands of properties remain closed, owned by individuals, the state, institutions, banks, and investment funds. Construction activity is insufficient to meet demand, while short-term rentals have reduced supply. As a result, most buyers consist of affluent Greeks and foreign investors seeking high-standard properties in prime locations.