Real estate prices reaching record highs

Bank of Greece data for first quarter show rises around country, especially in Athens and Thessaloniki

Real estate prices reaching record highs

The rate of house price growth is continuously exceeding record highs, according to data compiled by the Bank of Greece for the first quarter of this year. Indicatively, prices rose 14.5% year-on-year in Greece as a whole, with even higher increases in the two biggest urban centers, reaching 16.5% in Attica and 16.1% in Thessaloniki.

Similarly, prices in other large cities increased by 13.1%, while those in other regions of the country also leaped by 13.1%.

The surge in prices in Attica is such that for the second consecutive quarter the historical high for annual price change was exceeded. More specifically, in the fourth quarter of 2022, the annual price rise had reached 15.2%, being the highest performance in decades. Similarly, in Thessaloniki the increase had reached 14.5% in the last three months of 2022.

In Attica, prices have rocketed to the tune of 68% since the first quarter of 2017, just shy of the peak of the housing market in 2007. In reality, the price growth in Attica is significantly higher than the national average, which is 49% for the period 2017-2023 (Q1).

Newly constructed properties saw a large increase of 12.8%, while previously owned properties saw an increase of 15.6% when compared to the same period in 2022. The BoG also updated the figures for 2022 as a whole, reporting growth of 11.7% as opposed to a 7.6% increase in 2021. Similarly, according to the updated data, the average price increase for older flats was 11.3% compared to an increase of 7.2% in 2022, while the average price increase for newly constructed houses grew by 12.2% in 2022 (from an increase of 8.2% in 2021).

In addition to domestic demand, Attica’s sharp price increase during the first quarter of this year is undoubtedly attributable to the fact that it is a major target for foreign investors.

This year there has been an especially abnormal increase in foreign investment through the Golden Visa program, due to the upcoming changes, which will make it more difficult to obtain a residence permit.

The minimum investment threshold for property acquisitions in the center of Athens, the northern and southern suburbs, Santorini, Mykonos, and the Municipality of Thessaloniki will double (beginning August 1) to 500,000 euros, sparking a frenzy of transactions in an effort to get residence permits before the limit is raised. 

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