The effects of the pandemic on the local property market have been far from universal, according to the Bank of Greece report on monetary policy released on Monday. “The consequences will not be uniform and the rates of the medium- and long-term recovery will be different according to the category, location and special features of each property,” the report noted.
Firstly, it is certain that the property categories to be hurt most will be those that had benefited from the increase in tourism and buying interest from abroad. “March 2020 signaled the start of a new period in the real estate market, which is directly hurt also by the rapid contraction of the tourism sector, the suspension of investment activity and the uncertainty over the course and duration of the current crisis,” said the BoG analysis.
It went on to add that the sudden and almost universal halt of activity in the property market, the temporary suspension of the operation of property register offices, and the forced reduction of rents for suffering companies and their employees created conditions that do not allow for the immediate assessment of the effects on the market, given that this is an industry marked by inactivity and a time lag in reflecting price adjustments.
Regarding the housing market, the impact of the crisis is expected to be reflected both in sale prices and rents, albeit with significant variations between locations. The Bank of Greece argued that the apartments market will experience pressure in the short term, especially in the cities, mainly because of the reduction in buying interest in properties to be used for short-term holiday rentals.
The biggest blow to the office market is expected in properties in secondary markets, while state-of-the-art offices should see prices grow in the medium term as companies are expected to search for more modern spaces, even if they are smaller.
Pressure on demand is also expected as regards stores as a result of the rapid advance of online commerce and consumers’ reservations about shopping in brick-and-mortar stores – logistics space should see a rise in demand, though.