The Bank of Greece forecasts a stable situation in the real estate market
The impact of the pandemic on the domestic and global economy may affect the Greek real estate market in the short term. But as soon as the situation normalizes, demand will recover, experts promise.
“Given the high dependence of the real estate market on tourism and other sectors of the economy, it is expected that house prices will remain at the same level in the first few months of 2020 or will sink in some markets, depending on how long the emergency conditions last. Domestic and external demand will recover as soon as the situation normalizes, ” the Bank of Greece said in its report.
In the past few years, the Greek real estate market has been heavily dependent on foreign buyers. Much of the increase was accounted for by foreign investors, writes Ekathimerini.com.
According to the Bank of Greece, in 2019, net capital inflows from foreign investors approached 1.5 billion euros. This is 28.5% more than in 2018. Foreigners preferred to invest in residential real estate on the coasts, in the center of Athens and in the southern suburbs.
Against this background, housing prices in Greece rose by 7.2% in 2019. In Athens, growth reached 10.4%. Construction activity increased by 12.1% over the year. There was also a noticeable improvement in the commercial real estate market. In Athens, prices for offices rose by 6.7% and for stores by 9.7% in the first half of 2019.
However, as noted in the report of the Bank of Greece, the increase in prices and demand did not spread to the entire market, precisely because of the preference of foreigners for specific locations. One of the conditions for a full recovery of the real estate market is the strengthening of domestic demand, which will occur gradually as the economy improves, experts say.