The recovery of the residential market is accelerating, Bank of Greece figures on prices in the second quarter of the year have shown.
House prices in Athens posted a significant 6.4% increase compared with the second quarter of 2020, while in Thessaloniki the rise amounted to 4.1%. In Greece’s other major cities they grew 3.2% while they they advanced 2.6% year-on-year in the rest of the country. Across Greece in April-June residential property prices expanded at an annual rate of 4.4%.
The central bank has also upwardly revised the price changes of the first quarter and the whole of 2020: The latest data show that in January-March 2021 house prices posted an annual 3.5% increase (revised from 3.2%) and last year the rise amounted to 4.4% (from 4.3% thought previously). That followed 7.2% growth in 2019.
Over the April-June 2021 quarter newly built apartments enjoyed a 4.7% price increase, while those aged five years or more saw a 4.6% rise. That was after respective increases of 3.4% and 3.6% in the second quarter of last year.
It is quite remarkable that from 2018 to 2020 house prices in Athens posted a 20% hike, and, barring any unforeseeable circumstances in the rest of this year, the increase between 2018 and 2021 will exceed 25% and approach 30%. This development will also affect the volume of transactions, as foreign investors’ anticipated returns, mainly from 2022, will not amount to the soaring transactions, as prices are much higher than in 2019, the record year in the inflow of capital for property acquisition (1.45 billion euros).
Many foreign investors have positioned themselves in the Greek market so as to reap capital gains as prices were much lower than in fellow Southern European countries, and rates remain below their 2007 peak. Property market estimates say asset prices are undervalued between 27% and 38% compared to 2007. Yet as prices grow this gap keeps narrowing, and at a fast pace too.