Over €45 bln in realty by 2030
Over 45 billion euros, or €6 billion on an annual basis, is expected to be invested in the Greek housing market by 2030, according to a relevant report by the National Bank of Greece.
These funds will be headed in two directions, toward the construction of new homes (€40 billion), where there is a significant deficit, and the functional and energy upgrade of the existing building stock (€5 billion). This is expected to add a total of 350,000 homes to the stock of properties for sale, allowing demand to balance. In this context, NBG speaks of an average annual price increase of 3% in the 2025-2030 period, slightly lower than the projected increase in households’ disposable income.
However, the conditions of reduced supply in relation to demand are not expected to change in the near future, as a result of which the upward trend in residential prices will continue. The average increase during the years 2023-2024 is forecast at 7% throughout the country.
Already, though, prices are increasing at the fastest rate in the last 30 years, as, according to the indexes of the Bank of Greece, the average price increased by 14.5% during this year’s first quarter. At the same time, the average selling price in the eurozone changed marginally, by just 0.3%.
As the NBG analysis notes, the cumulative increase in housing prices from the third quarter of 2017 to the first quarter of this year amounts to almost 50%. Even so, prices remain 14% below the all-time high set in the third quarter of 2008. In the rest of Europe, prices are 37% higher than in 2008.
The main reason for the “rally” in housing prices is certainly the lack of supply in relation to demand. As NBG notes, demand for new homes will continue to accelerate and reach 35,000 homes per year, while based on the rate of issuance of new permits, no more than 30,000 new homes are expected to be built in 2023 and 2024. Combined with higher construction costs, this is expected to continue to fuel the upward trend in prices.
