Phenomena price inflation and a permanent decline in their purchasing power households began to be observed in buying a home. According to data published Bank of Greece (Bank of Greece)in the fourth quarter of 2022, the average increase in house prices was 12.2% compared to the corresponding quarter of 2021. Overall, for 2022, apartment prices rose by 11.1% year-on-year, compared to a 7.6% increase in 2021.

In Athens, the picture is even more dynamic, as prices rose by an average of 15.2% per annum in the fourth quarter, also the highest in decades. In Thessaloniki, the increase was 14.5%, in other large cities – 10.3%, and in the rest of the country the price increase reached 6.3%. In general, in 2022, prices in Attica rose by 13% per year, while in Thessaloniki, major cities and the rest of the country, the increase was 11.8%, 10% and 7.4%, respectively.

Newly built real estate increased by 12.1% in the fourth quarter, with a 12.2% increase in sales prices for old apartments (over five years old). For all of 2022, new home prices rose by 11.8%, compared to an 8.2% increase in 2021. Accordingly, older flats were up 10.5% year-on-year, compared to a 7.2% increase in 2021.

Eight out of ten home purchases are made without bank financing.

With prices starting to catch up with the previous market high of 2007, but with pressure on household incomes, high inflation and the highest cost of money in over two decades, it looks like the real estate market is now on its way. own rules, ignoring the broader macroeconomic environment. An injection of liquidity due to a surge in investment interest from abroad is one of the reasons why this is happening.

Another reason concerns the significantly limited supply of real estate for sale, as a significant amount, estimated at several tens of thousands of houses, is “stuck” in the hands of banks and service companies for legal or technical reasons.

To date, the largest volume of home purchases is carried out without bank lending (about eight transactions out of ten). This is also the reason why a large and sharp increase in interest rates has not had a negative impact on demand. However, as prices rise to the level of 200,000-250,000 euros for an average property capable of meeting the needs of a family of four, the more difficult it will be to cover such amounts solely from the same financing. This can “slow down” demand, having a direct impact on prices.