The Greek housing market retained its positive growth momentum in the first quarter of 2020 despite the start of the Covid-19 outbreak, DBRS Morningstar said in a report on Thursday.
It noted that after experiencing a long 54% decline from 2009 through 2017, property prices increased by 9% in 2018-19 and then by an additional 6.9% from January to March 2020. Growing foreign investors demand and improved domestic economic conditions have been the main drivers of the revival in the residential property market.
However, the unprecedented economic shock caused by the pandemic likely will have had adverse effects on construction activity and real estate transactions in the second quarter of 2020, and raises uncertainty around the evolution of the market and prices in the second half of the year.
“The recent effort to improve the functioning of the public administration by digitalizing a significant number of processes is deemed as positive, and if it continues at the same pace, it will be an important step in the government’s strategy to reduce red tape and improve the business environment in Greece,” said Spyridoula Tzima, assistant vice-president at DBRS Morningstar.
Given the high reliance on foreign demand, the outlook of the Greek housing market this year will largely depend on the evolution of the pandemic and the pace of recovery of the major foreign buyers’ markets, their appetite for travel and to some extent their confidence in Greece’s flexibility and handling of the crisis, the report noted.