Strong increase in house prices
Residential property prices have risen considerably over the last three years in Greece despite the onset of the pandemic, as the average rates in Athens are now 30-32% higher than in 2018, while in Thessaloniki they have climbed 21-25%, in the other major cities they have grown 9-14% and in the rest of the country by 10-16%.
Still, despite that remarkable rebound, houses remain between 22% and 37% cheaper (depending on the area) than the peak they had reached in 2007, as Babis Charalambopoulos, scientific consultant to Solum Property Solutions, tells Kathimerini.
Although there is a clear upward trend in the country, especially in the two main cities, the new normal in the market shows forces pushing rates higher and others working in the opposite direction, Charalambopoulos points out.
For instance, on the one hand there is increased demand for and therefore growth in the prices of the few new buildings, which as a rule are located in prime locations; on the other hand the pandemic has had serious effects on the economy, preventing a large section of middle incomes from making plans to buy a house, turning instead to renting. Furthermore, while banks are issuing mortgages, many consumers appear reluctant to borrow following their negative experience with the bad loans of previous years; they must now have capital of their own amounting to at least 25% of the property to be acquired.
“We therefore find ourselves in a transitional stage with two main trends, which either pull prices higher or push them lower; these trend will generate a new price basis that will vary depending on the city, the location, the size of every property, the quality and its state, its age and other features,” explains the Solum Property Solutions adviser.
He adds that demand is also seen for older constructions if their location and size are right and prices are within reach, as the buyer will also have to spend money on the property’s improvement.
There is further demand in provincial cities with student communities, and an increase in holiday home rates, especially in the most popular tourism destinations.