Property price rally is ending
Banks and real estate market operators are predicting a mild decrease in home sales prices for 2024 since, as they estimate, the rally of the last two years is coming to an end.
The common denominator of the estimates is that values will continue to rise overall, but at a decidedly slower pace, while there will also be areas of lower demand, where even a small decline in sales prices may be observed to facilitate the sales.
In a report just before the end of 2023, the Bank of Greece noted that “the first indications have been identified, possibly pointing to an imminent period of price correction, especially for uses, properties and locations in lower demand.”
According to the BoG, “expectations for the next period remain moderately positive, under the influence of international developments and the environment of high inflation, increased interest rates and uncertainty. At the same time, the change in demand characteristics, which began during the pandemic period, continues to this day, with specific property categories and locations attracting disproportionately high investment interest, reinforcing the image of a market of different speeds.
“To the extent that demand from abroad will be maintained and the supply of quality properties will remain limited, prices are estimated to continue their upward path in the high-end segment of the market, dragging prices upwards in the secondary markets as well. The rates of price growth are expected to become milder, however, as the current situation does not allow investors to be complacent about the medium-term evolution of market conditions,” concluded the Bank of Greece.
In a recent analysis, Alpha Finance reported that the average annual rate of price growth in 2023-2025 will be just 3%. As the company’s relevant analysis states, this is a forecast supported by both the European Banking Union and the European Central Bank.
National Bank of Greece appears more optimistic, noting in its own analysis of housing sales prices that their average increase for the period 2023-2024 will reach 7%. Overall, for 2025-2030, National predicts an average increase in sales prices by 5% on an annual basis.
