Stabilization of selling prices residences industry experts expect 2023, according to a related survey by Cerved Property Services. According to 55% of the participating specialists, prices are expected to stabilize as a result of a number of negative factors, such as inflationincrease in construction costs, increase interest rates housing loans, declining household incomes and general economic insecurity. Conversely, 37% expect prices to rise further, and only 8% believe prices will fall.

Served’s analysis notes that supply has lagged far behind demand. After all, it was for this reason that a significant increase was recorded, as a result of which the values ​​are now at the level of 2011, immediately before the start of a sharp decline in prices. However, they remain below the all-time high recorded in 2007, when economic conditions were very different from today.

According to Červed, “today demand exceeds supply in the Greek housing market and comes from both Greeks for private use and foreign and Greek investors. Due to the rapid growth rent and return on housing, and in combination with the expected capital growth, residential real estate has now become an investment product, as investing in it compensates for inflation in the absence of more efficient and safe alternatives for placing cash reserves, ”the company notes.

However, the offer is currently limited due to the high volume of transactions that have taken place in the previous three years. “The rate of absorption of housing since 2017 is much higher than the rate of commissioning of new real estate On the market. Available-for-sale stocks were not replenished, as a result of which prices continued to rise, although the upward trend could be expected to slow down due to geopolitical and economic conditions. According to 59% of respondents in the latest annual survey of the Greek real estate market (the number of participants exceeded 200 experts across the country), the market experienced a surplus in demand in 2022 compared to 2021.

The main reasons are inflation, higher construction costs and expensive loans.

One of the reasons for this, of course, is the fact that many residential properties that could be put up for sale remain “trapped” as they are debt guarantees, and the process of paying off these debts has not yet been completed. However, even in cases where this has happened, the process of holding the auction, its final return by the freight forwarder, its legal and urban unraveling, and finally its sale still takes two years.

Aliens dominate

The interest of foreign investors has become a decisive factor in the rise in prices, as foreign capital inflows have increased significantly in recent years. As highlighted in the Cerved report, foreign investors are finding high returns in Greece due to lower house prices compared to other European countries. “Even in areas that are considered more expensive, such as the Athenian Riviera or the popular Greek islands, prices are lower than in other popular European destinations. Athens maintains relatively low house prices and investors see its market as an opportunity, given that they provide yields of around 5%, while in most Western European capitals it does not exceed 3%.

Profitability on tourist islands is much higher. According to market experts, the participation of foreign buyers in the Greek housing market is predominant, as now they carry out more than 50% of transactions,” concludes Cherved.

At the same time, domestic institutional investors are now selectively placed in the housing market, as are companies investing in real estate. In this regard, developments with high sustainability indicators are planned for the sale of luxury apartments and villas. The absence of such properties on the market and high demand, both for private use and as a high-yield investment option, have led to an increase in prices in this category as well.