Greek real estate market in Greece-Prospects of 2023
It is now obvious that the Greek real estate market, despite the ongoing international crises, presents the best growth prospects for the coming years compared to other European countries.
The Greek economy has started to come out of the biggest economic crisis of the last decades and eventually has now entered a new development cycle in the last four years. Today it is called upon to operate in a difficult political and economic environment. Also, it presents impressive strengths and positive prospects compared to many other European countries. Government support programs for the market, a practice implemented by all European states in the context of aid provided by the European Union, have significantly helped in this.
However, the economy remains to show its real endurance after the end of the subsidy of the support measures, as the structural problems of the Greek economy remain to a lesser or greater extent. It is important, however, that steps are being taken in the right direction to strengthen the structures and operation of the main sectors of the economy, so that they can support the country’s development in the medium and long term, without serious shocks.
Based on the estimates of the Bank of Greece, the Greek real estate market maintains its momentum, although it must deal with the influence of international developments and the uncertainty they present, mainly due to the ongoing war in Ukraine and the increase in energy costs.
Despite the wait-and-see attitude on the part of investors due to war, inflation and increased interest rates and the already observed decline in construction activity, it is expected that there will be a significant development of the Greek real estate market from the second half of 2023 after the parliamentary elections in Greece.
The reasons behind this rise-Main factors
The positive trend of tourism, the growth of short-term rentals and the increase of investment from abroad continue to fuel the dynamics of the market.
In particular, the significant cumulative drop in real estate values of more than 40% and the limited construction activity of the last twelve years have highlighted important opportunities and possibilities, which in combination with the gradual strengthening of investments, the effort to fight bureaucracy through digital upgrading of the state, the launch and acceleration of important infrastructure projects, the dynamics of tourism and the further recovery of the economy, are expected to give additional impetus to the positive dynamics that the real estate market is gradually developing.
The still low real estate prices combined with the highest real estate yields in Greece compared to all other European countries make the Greek real estate market the most attractive and potentially one of the most dynamic markets in all of Europe.
According to the experts of the real estate market and the central bank, at the forefront of demand are properties related to tourism, short-term and long-term leases, and investments in commercial properties (offices, shops), while the interest of market for high-end holiday and residential properties. This trend is expected to continue in 2023.
The positive prospects of the real estate market in Greece are also confirmed by the research of PWC and the Urban Land Institute (ULI) in their annual report titled Emerging Trends in Real Estate 2023, which concerns European capitals.
In this survey, Athens maintains the 23rd place for 2023, as in 2022, succeeding in improving its rating by 5 places – from 28th in 2021 – based on the criteria of “investment perspective” and “property development prospect”.
Factors that enhance the development of the Greek real estate market
– Tourism Development
– More favorable tax regime
– Plan “Greece 2.0”
– New major investment projects underway
– Resurgence of housing credit (despite recent rate hikes)
– Mortgage subsidy for young people up to 39 years old
– Upgrading the visibility of Greece abroad as an investment destination – attracting large multinational companies (Microsoft, Pfizer, Intel, Amazon, etc.)
A few factors are expected to contribute positively to the development of the Greek real estate market for 2023, such as the dynamic development of tourism, which remains the important growth driver of the wider economy.
The more favorable tax regime with a series of regulations and incentives that facilitate transactions and investments in real estate, such as the ENFIA reduction, the VAT suspension for new constructions, the tax-free limit for parental benefits up to 800 thousand, will work similarly positively. tax credits for renovations, etc., the opening of banks with offers of more mortgages, the National Plan “Greece 2.0” and the increased visibility of Greece abroad as an investment destination in sectors including real estate.
An equally key factor that further strengthens the positive prospects of the Greek real estate market for 2023 is that the Greek state will for the first time subsidize loans for 10,000 new home buyers (age up to 39 years) for apartments up to 120 sq.m. manufactured until 2007 and priced up to 150,000 euros.
The new major investment projects currently underway as well as those planned within the next three years are the best proof of support for the basic infrastructure and sectors of the economy, empowering the further improvement of the economic climate and the prospects of the economy and the development of real estate. Some typical examples are the investments in Elliniko, the renovation of the Piraeus tower, the Thessaloniki Metro, the extension of the Athens Metro, the expansion and upgrading of the regional airports of Heraklion, Kalamata, the construction of three new green hospitals by the S. Niarchos Foundation in Thessaloniki, Komotini and Sparta, Ms.
Finally, the opening to new markets should also be mentioned, such as Germany, which in the last three years of the pandemic occupies the first place in property searches in Greece from abroad.
Of course, there are also some factors that cause uncertainty by disrupting the general sense of balance that prevails, which do not completely concern only Greece.
These are mainly the following: Political uncertainty.
– War in Ukraine
– Continuous threats from Turkey
* Economic uncertainty
– Energy crisis and increase in the cost of energy and raw materials
– Disruption of international supply chains
– Excessive increases in real estate prices
– High interest rates
* Health risks
– Pandemic (fear of an outbreak of the covid 19 pandemic due to new variants and fears of new pandemics)
Uncertainty parameters should cause concern if they remain for a long period, as they may stop the pace of construction activity and limit the expected capital returns of the real estate market.
*Source: https://www.capital.gr/me-apopsi/3705012/prooptikes-tis-ellinikis-agoras-akiniton-gia-to-2023/ & https://www.europanostra.org/athens-will-host-europa-nostra-heritage-hub-for-south-eastern-europe-and-eastern-mediterranean/