Greece’s real estate prices rose once again during the first quarter of 2022. But industry experts say this might be “the end of the ride,” since reduced international interest, coupled with prices getting out of reach for the locals, signal a downturn in trades
July-August 2022 Greek Business File, Issue No 138
by Dimitrios Pefanis
According to the Bank of Greece, house prices rose by 8.6% on average during the first quarter of 2022 on an annual basis, with newly erected apartments appreciating even more, at a 10.3% annual rate. The rise in prices is incremental, since real estate in 2021 appreciated at a median level of 7.9%. However, as industry insiders claim, a lot has changed between March and today, since the global turmoil, increase in energy prices and rising interest rates have changed the rules of the game in a matter of weeks. So, despite the fact that no official statistics can prove the change in pace, the second quarter of 2022 brought a steep decline in finished trades and an equal number of setbacks on deals that were on track.
Lack of Chinese and Russian investor
One of the reasons that have created the turmoil and contribute to the “numbness” of the market is the sudden stop of inflows from Chinese and mainly Russian investors. Both nationalities were prime candidates for the “Golden Visa” program which has contributed over €5 billion of investments in real estate, whereas Russian buyers were flocking to the islands, looking for second homes.
EU sanctions on Russian capital after the Ukraine invasion on the one hand and the continuous effects of the COVID pandemic in China on the other have brought theses investments to a halt, thus depriving the real estate market of the much needed fuel necessary to sustain the rise in prices. And with the situation in Russia at a standstill and the pandemic reigning still strong all over the globe, no-one is certain as to when — and if — these investors will return to the Greek market…
The full article is published in the July-August 2022 Greek Business File, here.