The real estate market in Greece enters the new year on a trajectory to maintain the strong pace it developed in 2023. With the “balance” of available properties and demand remaining negative and investors considering the Greek market to remain undervalued relative to the rest of Europe, the omens are good. So good, that real estate industry players estimate that 2023 will leave with an all-time high of €3 billion in foreign real estate investment in Greece, and 2024 will come with enhanced trends for… breaking that record again .
The rise of Greek real estate, whether it concerns residential or commercial real estate, is strengthened by the course of the Greek economy, the continuous rise of tourism, but also the lively interest of investors, mainly from abroad, who seem to be attracted by the mega project of Hellinikon and tourist destinations. Besides, the demand is very strong, especially for newly built, high energy class, luxury – often minimal – properties, even in “traditionally” affordable areas. There are many who see, with the strengthening of tourism, but also with the large projects that form the Athenian Riviera, an investment opportunity in our country, especially now that other European markets are showing signs of fatigue or even a bubble.
In the global real estate stock exchange, Greece presents itself as an underpriced, high yielding stock. This is also confirmed by the 2023 Global Luxury Landscape Report of the global real estate giant, Berkshire Hathaway Home Services. The report singles out the Greek real estate market as the leading European investment destination – along with Portugal and Spain – finding that it maintains its strong momentum in the preferences of luxury homes by foreign investors of a global reach. It is even given a special mention in the Henley Private Wealth Report 2023, in which Greece is ranked 7th among 15 leading countries, with a projected inflow of 1,200 high net worth buyers for 2023, a percentage increased by 20% compared to the previous year.
And all this at a time when the global real estate market appears to be gasping or showing signs of a bubble, turning from a mainstay of the economy into a burden or risk. The example of China is typical, where the real estate market, according to Bloomberg data, while it increased GDP by 1.6% in 2015, burdened it by 1.3% last year, with the decline in sales pushing market giants such as Country Garden Holdings Co. into default on their payments, while he curtailed the spending of others.
The Urban Land Institute’s (ULI) annual emerging trends report in partnership with consultancy PwC finds that the changing macro backdrop in real estate is putting investors on hold, noting that the market is “beginning to come to terms with ongoing inflationary pressures, rising interest rates and ever-increasing commitments around environmental, social and governance (ESG) issues. The uncertainty is exacerbated by the geopolitical scene with the crisis in Israel and Gaza, as well as the ongoing war in Ukraine. A direct consequence of all this was the low investment volumes.”
Upward trajectory
That the momentum of rising property prices – which is largely, up to 60%, due to the increase in construction costs, as the relevant research of the Bank of Greece points out – will be maintained at least for the first half of 2024 is also confirmed by the majority of analysts in the real estate industry. The Central Bank records that in the third quarter of 2023 the average annual increase in real estate prices in Greece exceeds 12%, while the SPI index of the classifieds network Spitogatos records the same trend, which states that the market has increased by 12, 5%, with further upward trend.
In 2022 and the first nine months of 2023 alone, foreign direct investment in the real estate market amounted to 2.9 billion euros. For 2023, the BoE analysts point out that “foreign direct investments in real estate amounted to net receipts of 1,644 million euros, exceeding by 28.7% the corresponding level of receipts recorded in 2022 (1,277 million euros)”. “Red hot”, i.e. “reddish and hot”, characterizes the Greek residential real estate market the chief economist of the Global Property Guide, Lalaine C. Delmendo, in her report on it.
“Demand from foreign home buyers is growing strongly,” the economist points out, citing that “in the first half of 2023, the total value of real estate purchases by foreign buyers, which represents 80% to 85% of all real estate purchases in Greece , jumped a whopping 39.9% year-on-year to €1.1 billion, following year-on-year increases of 68% for all of 2022 and 34.4% in 2021.”
A survey by the company Elxis also found that real estate in Greece is at the center of the interest of investors from abroad. According to her, this year the value of property sales increased by 33% compared to 2022, while the purchase price by about 12.5%, with buyers coming from the US, UK, Germany and France and mainly looking for holiday homes (in the southern suburbs of Attica, Cyclades, Crete, Peloponnese and Argosaronic) due to the lower prices than the counterparts abroad. Rapid rise in demand for luxury constructions
In the role of “leader” of the Greek real estate market, luxury, i.e. the luxury housing market, which is on a rapid rise, has been placed. It is not only the natural beauty and the geographical location of the country, but also the low cost with other destinations, such as the south of France, Italy, Spain, Portugal, etc. which play a role in the preference of foreign investors for Greece.
This is also confirmed by the Savills Prime Residential Index Report research on the luxury homes preferred by the world’s big wallets, by the Savills consulting company. According to her, Athens offers luxury real estate with a lower average price per square meter than other popular megacities. In the Greek capital, the offered price per sq.m. is set at 10,800 euros, compared to 12,800 euros/sq.m. in Lisbon, 13,400 euros per sq.m. in Rome, 14,600 euros/sq.m. in Milan.
An interesting point that emerges in this area for the Greek real estate market, is the conclusion of the Berkshire Hathaway HomeServices report that there is an increase in the percentage of American buyers by 15%-20% within a year from 2022. They, according to with the company’s research, they aim to purchase luxury homes and properties in areas of the Athenian Riviera, the northern suburbs of Attica and the iconic Greek islands, such as the Cyclades, Mykonos, Santorini, Paros, Crete, Corfu and Rhodes.
American high-net-worth investors, whose Golden Visa applications are up 740% from 2021 according to immigration investment firm Astons, along with the Chinese are the two strongest players in the property market, favoring luxury.
This is also the reason why, as the Managing Partner of Berkshire Hathaway HomeServices Athens Properties, Kyriakos Xydis, estimates, the doubling of the Golden Visa acquisition limit did not seem to deter foreign investors. Mr. Xydis states that “the purchase of luxury homes in Greece starts at €500,000, so any buyer of a luxury home of that amount and above is automatically eligible to apply for a Golden Visa.”
Athenian Riviera: The Hamptons ala Greek
The beachfront of Athens, from Alimos to Varkiza, is a distinct case for the domestic real estate market. Centered on the largest urban regeneration project in Europe, which is none other than Elliniko, but also with the new emblematic investments such as the ultra-luxurious “One & Only Aesthesis” by Grivalia Hospitality in Glyfada, the Athenian Riviera is “taking off” on all levels . And first in that of prices, which have not only “forgotten” the crisis by surpassing the levels of the golden era of real estate, in the 2007-2008 period, but are breaking one record after another.
In reality, the mega project of Hellinikon is on the one hand a dominant pole of investment placements in its famous towers and residential complexes, but on the other hand it is also a “guide” for the new developments around the area of the former airport, as well as up to Voula and Vouliagmeni. In other words, an investment El dorado, a parallel “redevelopment,” is underway as any vacant lots are built on and old properties are torn down to accommodate high-end apartment complexes. Already in the wider area, new developments have taken their place with the signature of distinguished architectural offices, which meet the modern standards of bioclimatic design, energy saving and luxurious benefits, such as private swimming pools, etc.
The Athens Riviera is emerging as a prime real estate area according to Sotheby’s International Realty, which describes Glyfada as Greece’s ‘The Hamptons’ with villas for a variety of tastes. Comparing the coastal route to the famous destinations of Capri and Amalfi, the international estate agency refers to Vouliagmeni as “the place to be”…
The prices for luxury homes in the area are at a similar height, starting from 11,500-12,000 euros/sq.m. and reach or even exceed 20,000 euros/sq.m. For example, an impressive residence in Glyfada with an area of 367 sq.m. is for sale for 6 million euros, while in Vouliagmeni a villa of similar specifications of 570 sq.m. is valued at 6.8 million euros and in the famous “Petalouda”, by the architect P. Hatziaggelidis, for a top residence of 548 sq.m. one should give 6.35 million euros. Of course, this is not an obstacle, since as can be seen from the “pulse” of the market, demand is strong and growing, with the result that several complexes are pre-sold even before the betas fall… As for the target group of buyers, they include both Greeks and and foreigners, mainly Americans, Arabs, British, Germans and also Turks, who in any case have the corresponding financial surface.
The investment interest in the area of the Athenian Riviera has mobilized many companies that have already completed or are planning large residential projects. Among them are some of the “heavy names” of the domestic real estate market, such as Prodea Investments AEEAP, which intends to develop a residential building with a total area of 2,800 sq.m. on the outskirts of the former airport. The Greek arm of the Dutch real estate giant Ten Brinke is completing at least five luxury residential projects in the wider Hellinikon area. The largest of these is located on the side of Glyfada Golf, on Konstantinou Karamanli Street and has five floors. In the same area is located P&C Development, interests of Christos Panagiotopoulos, former president of Reds, with “Six Alpha Luxury Homes”, as well as many other technical companies with projects of renowned architectural offices.
In the famous Vouliagmeni, for a top residence of 548 sq.m. one should give 6.35 million euros
Champions
As far as the availability of residential properties for sale is concerned, in the third quarter of the year “champions” emerge, according to the research, in the southern suburbs and the center of Athens. Nevertheless, the supply in these two areas does not show an increase compared to the corresponding period last year
Glyfada, Voula, Paleo Faliro, Alimos, Nea Smyrni in the southern suburbs showed the highest availability of residential properties for purchase in the period under review. Among the most decentralized areas, where most single-family homes were available for sale, Voula is also found , Vari – Varkiza and Glyfada.
However, an impressive rise was noted in areas of the rest of Attica, in a number of areas of Piraeus
Prices soared
In terms of prices, according to the SPI index that records their evolution over time in the domestic real estate market, asking sales prices increased by 7.12% compared to the 3rd quarter of 2020. In Attica, the highest increases in requested sales (and rental) prices are recorded in areas far from the center of Athens.
The highest asking sales prices in Greece, based on the average sales prices in the advertisements, are held by Mykonos, the beach front of Athens. Average asking prices in the southern suburbs have increased by 14% year-on-year, reaching 3,611 euros per sq.m. and 12.5% in the Cyclades with 3,333 euros per sq.m., although the final price is determined by the property’s location, age, areas and other factors that create a “scissor” in prices.
In the whole country, the most expensive average asking price is presented by Mykonos, with the average price at 6,692 euros/sq.m., having overtaken Greece’s second most expensive, Vouliagmeni, with 6,667 euros/sq.m. and an increase within one year of 12.4%. The “scissors” to which we referred before, catapults the prices in these areas even above 20,000 euros/sq.m. if it is in a privileged position, newly built, luxurious and has appreciable amenities. In Attica, 4 of its 5 most expensive areas, Vouliagmeni, Voula, Alimos and Glyfada, have increased their prices by almost 17% in one year and are located on the Athenian Riviera.
With most buyers coming from abroad, the Cyclades register strong demand and… an even stronger increase in prices, with the runner-up, after Mykonos, Santorini, where in the period under review the average asking prices are 4,069 euros per square meter. However, the northern suburbs of Athens are also making a dynamic return to the market, where the average asking price increased by 10.9% in the year, reaching 3,333 euros per sq.m., with certain areas, such as Agia Paraskevi and Pefki, to register an increase in prices, approaching 35%! Outside of Attica, the average asking price is high in Kea, reaching 2,973 euros/sq.m., and more economical options in Tinos, Andros and Syros, with prices, respectively, at 2,419, 2,136 and 1,833 euros/sq.m.
According to a 2023 Apartment Values Observatory survey, an impressive increase in potential apartment sales prices continues to be recorded in five areas of the greater Athens area. Thus, between the third quarter of 2023 and the third quarter of 2022, a median annual increase of 14.92% is recorded for the newly built and 13.81% for the older apartments, which is mainly due to the reduced supply due to tourist demand and Airbnb.
3 million Europeans would like a home in Greece
Several analysts estimate that in the new year a large portion of investors will focus their interest on the islands and the wider area of the capital, with the renovation of old properties in Athens being a “niche market” with upward trends. . It is clear, however, that by no means is the market experiencing bubble conditions today, as the level of supply (particularly of new-build apartments) is still very limited relative to demand.
And if a relative slowdown is expected in urban areas, in the holiday home sector, estimates converge that the increase in values will continue at the same or even greater rate in 2024. To this end, the fact that Greece and especially its island regions are emerging attracting European funds for buying country houses.
Here, as a relevant survey by the Greek interests of a Dutch company shows, there is a “bright field of glory” as around 3 million Europeans are strongly flirting with the idea of acquiring a second home in our country. The major comparative advantage, beyond the climatic conditions and the natural beauty, is financial, as in Greece the average sale price of a newly built holiday home is around 300,000-350,000 euros, light years away from the prices for similar properties in other European countries South.
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