Real Estate: How Housing Prices Will Change in 2024 and Where Opportunities Exist Today - Economic Postman - ot.gr

In recent years, the Greek real estate market has been showing a rapid increase in prices, outpacing many other countries in Europe. This is linked to the recovery from a prolonged economic crisis. Increased investments in construction, a rise in foreign direct investments in real estate, the development of the tourism sector and the sharing economy, the "Golden Visa" program, and the accumulation of savings during the pandemic — all these factors make the Greek market unique compared to other more developed countries, where there is a slowdown in price growth or even a decline.

In 2023, the real estate market in Athens, Piraeus, and Thessaloniki is experiencing a rapid surge in housing and rental prices. However, it is important to determine whether this growth will continue into 2024. The situation is influenced by demographic factors such as an aging population and urbanization, as well as current circumstances like the shortage of energy-efficient housing and subsidized programs, such as "My Home," which continue to support high demand. Real estate market experts also point out the need for price adjustments, particularly regarding the asking prices for homes, as there is a noticeable fatigue among potential buyers, especially among Greeks, leading to a decrease in the number of transactions.

If the supply in the market increases — for example, if funds start selling off properties that are currently being held, if interest rates decrease and construction costs improve, as well as if there are no undesirable geopolitical upheavals that could lead to rising energy prices and, consequently, inflation — then it is quite possible that prices will decrease, even in nominal terms.

Returning to the rise in prices, it should be noted that the recovery in the residential real estate market, which began in 2018, continued throughout 2023, recording double-digit price changes. According to the Bank of Greece, residential property prices in the country have increased by a total of57.5%compared to the peak reached before the budget crisis. In particular, according to the apartment price index compiled by the Central Bank, the highest values were observed in 2008, after which there was a continuous decline that led to the lowest prices in 2017.

It's interesting that at the moment, foreign investors play a significant role in the real estate market, while purchases by Greek citizens are limited and mainly financed through their own resources. Direct foreign investments in real estate significantly increased in September 2023, amounting to net inflows of...1.644 billion eurosthat on28.7%more compared to the same period in 2022. Thus, the market is still heavily dependent on foreign investments, which could lead to potential corrections.

In the segment of high-end real estate, where elite apartments and houses are located, Greece has positioned itself among the "emerging markets." According to the latest report from Berkshire Hathaway HomeServices, it stands out as one of the top European destinations alongside Portugal and Spain, and is among the countries worthy of attention due to its low prices.

Golden Visa Program

The "Golden Visa" program also serves as an indicator of demand from foreign clients. According to the Ministry of Migration, from January to November 2023, there were submitted9,459statements on long-term investments, which on117%more than in the same period of 2022. Initial claims amounted to7,752...which corresponds to real estate investments of no less than...1.9 billion eurosSince the program came into effect in mid-2014, it has attracted more than5 billion eurosinvestments.

Increase in the investment threshold for obtaining a "Golden Visa" to500,000 eurosIn popular areas such as the central, northern, and southern districts of Athens, Mykonos, Santorini, and the city of Thessaloniki, there has been an interest in alternative locations like Piraeus, where the minimum threshold remains the same.250,000 eurosAccording to the Spitogatos Property Index, Piraeus has become the leader in annual price dynamics with an increase of23.2%, and the suburbs — on25.6%In 2023, the average price per square meter in Piraeus today is2,175 euros, having increased from1,765 eurosA year earlier, and in the area around the country's main port, the figures reach1,800 eurosagainst1,433 eurosat the end of 2022.

This sharp rise in prices in Piraeus may be temporary, experts and lawyers involved in investment migration note, pointing out that many of the properties being offered do not meet investment criteria and cannot be easily used for short-term rentals.

Alongside the fact that Piraeus has become expensive, the residential areas remain the most affordable in terms of cost. Thus, the second most affordable areas in terms of housing prices are located in the west of the capital, where an increase has been recorded.18.7%to1,875 eurosper square meter. Outside of Athens and Thessaloniki, there are also many opportunities in areas such as Pella, Serres, Kilkis, Aetolia-Acarnania, Arta, and others. In these regions, prices per square meter often do not exceed1,000 euros.

Currently, according to the SPI index data, the lowest selling price is in Kastoria, where prices have recorded the largest decrease.15.40%in the fourth quarter of 2023.