2022 was characterized as one of the best years in terms of the performance of the real estate market and the real estate market in Greece since the beginning of the crisis, exceeding all expectations in terms of transaction volumes and total sizes in m2 and m3 as well as the number of permits for new constructions. In many regions of Greece, but with the main spearhead being the Athenian Riviera, the housing market is following a frantic upward trend, which for the first time seems to be based on solid foundations, as it is taking place in parallel with major infrastructure projects and investment plans unprecedented for the construction sector in Greece.
With prices breaking one high after another and with an unprecedented investment fever, there are more than a few who are sounding the alarm and recommending a more moderate approach to the market, reminding us that markets operate in cycles.
The Greek real estate market has experienced its ups and downs over the years, driven by various factors such as economic developments, political changes and global market trends. Understanding the cyclical nature of the real estate market is crucial for investors, property owners and policy makers. In this article, we will delve into the cycles of the real estate market in Greece, exploring the historical context, key drivers and the impact of various events on market fluctuations. By examining the patterns and trends that have shaped the Greek real estate market, we aim to provide valuable information for individuals wishing to navigate this dynamic sector.
A brief historical review of Greek real estate market cycles will help us to better understand the environment in which this market sector is currently developing and its prospects.
I. The rise and expansion
The development of the Greek real estate market can be traced back to the post-war era, as the nation embarked on a path of reconstruction and economic growth. Urbanisation, industrialisation and a growing middle class led to an increasing demand for residential and commercial space. During the 1960s and 1970s, Greece emerged as a popular tourist destination, leading to a demand for holiday accommodation and residential rentals, especially in coastal areas and islands.
II. Boom and bubble
The turn of the millennium marked an important period for the Greek real estate market. Greece hosted the 2004 Summer Olympics, resulting in a building boom as the country prepared to showcase its infrastructure to the world. In addition, Greece’s entry into the Eurozone brought economic liberalisation and easy access to credit, which further fuelled the property market.
The combination of the Olympics and financial sector liberalisation led to a surge in property prices as speculation and investment reached unprecedented levels. However, the global financial crisis of 2008 had a profound impact on Greece, causing property prices to collapse and leading to an oversupply of unsold properties. The bursting of the real estate bubble, combined with the economic recession, created a period of stagnation and uncertainty in the market.
III. Recovery and resilience
In the years following the financial crisis, Greece embarked on a path of structural reforms and economic recovery. These reforms were aimed at restoring stability and confidence in the real estate market, attracting both domestic and foreign investment. Initiatives such as the Golden Visa programme, which grants residence permits to non-EU investors, have played an important role in attracting foreign buyers and stimulating demand.
Despite the challenges, the Greek real estate market has shown resilience and the recovery has gained momentum. Economic stability, improved fiscal policy and increased investor confidence have contributed to the restoration of the upward trend in the market. Real estate prices have gradually started to rise, albeit at a more sustainable pace compared to the pre-crisis period.
IV. Current trends and future prospects
It is a fact that, due to the small size of the country, the real estate market, and the real estate market in general, has been influenced over time by a number of factors. One notable trend is the increasing interest from international investors, especially for prime locations such as Athens and especially the Athenian Riviera, Thessaloniki and the Greek islands. The short-term rental market, driven by platforms such as Airbnb, has also gained momentum, providing opportunities for property owners.
As of today, the Greek property market continues to evolve, influenced by a number of factors. One notable trend is the growing interest from international investors, especially in prime locations – areas such as Glyfada, Voula , Varkiza , Elliniko , and popular Greek islands such as Paros , Mykonos , Santorini etc. The short term rental market , driven by platforms such as Airbnb , has also gained momentum , providing opportunities for property owners .
In addition, recent developments such as the COVID-19 pandemic have introduced new dynamics to the market. The pandemic temporarily disrupted the real estate market due to travel restrictions and uncertainty. However, as Greece is gradually emerging from the crisis, the real estate market is expected to recover due to unmet demand and the country’s attractiveness as a tourist destination.
Looking ahead, experts believe that the Greek real estate market is likely to continue its recovery path, albeit with moderate growth. Economic stability, ongoing reforms and the expansion of digital platforms for real estate transactions are expected to play a key role in shaping the future of the market.
Current political developments, with Greece facing a second round of parliamentary electionswill certainly play an important role in the evolution and development of the market. International markets have already started to anticipate a possible victory of the liberal-conservative party that ruled in the 2019-2023 term leading the country to stability and growth. Especially in the real estate sector, a series of decisions and laws of the last four years created a particularly favourable environment for real estate investment and the upward trend of the market.
Real estate market cycles in Greece have been shaped by a combination of historical events, economic developments and global influences. From boom and expansion to boom and subsequent bubble and, finally, recovery and resilience, the Greek real estate market has demonstrated its ability to adapt and recover over time. Understanding these cycles is vital for investors, property owners and policy makers to make informed decisions. Infrastructure projects, tourism growth, stability and the unique locations offered by the Greek market ,create positive expectations for the future, viability and growth of the real estate market. AS Greece moves forward, embracing sustainable growth and facing challenges, the real estate market is poised to continue its evolution, offering opportunities for those who navigate its cycles wisely.
by Kioleoglou Konstantinos REV
Partner Avakon Properties
Civil Engineer, N.T.U.A
MSc in Structural Engineering, N.T.U.A
MSc in Real Estate Investment and Finance, Heriot Watt University
Recognised Expert Property Valuer & European Valuer ,Tegova