A Deep Dive into Greeces Residential Real Estate Market for 2024

Greeces housing market continues to experience rapid growth, driven by strong foreign demand, increased residential construction, and steady economic performance.

In Greeces urban areas, house prices surged by 10.76% in Q1 2024 compared to the previous year, following significant annual increases of 12.48% in Q4 2023, 13.05% in Q3, and 15.22% in Q2. This marks the tenth consecutive quarter of double-digit growth, as reported by the Bank of Greece. When adjusted for inflation, urban house prices rose by 7.31% year-on-year in Q1 2024.

On a quarterly basis, house prices in urban areas saw a rise of 2.4% (2.76% in real terms) in Q1 2024. Despite this strong growth, property values in Greece remain relatively affordable compared to many European countries, making it a hotspot for foreign investors.

House Price Growth in Major Cities

House prices continue to climb in Greeces largest urban centers:

• Athens: Property prices in the capital rose by 9.35% year-on-year in Q1 2024 (5.94% in real terms), showing a slowdown from the previous year’s 17.39% growth. On a quarterly basis, prices were up 2.58% (2.93% in real terms).
• Thessaloniki: Greeces second-largest city posted the strongest growth, with prices rising by 12.19% year-on-year in Q1 2024 (8.69% in real terms), marking the city’s eighth straight quarter of price gains. Quarter-on-quarter, prices rose by 2.35% (2.7% in real terms).
• Other cities: Excluding Athens and Thessaloniki, prices rose by 10.28% year-on-year (6.8% in real terms) in Q1 2024, following a 14.95% increase in 2023. On a quarterly basis, prices increased slightly by 0.65% (1% in real terms).

Foreign Demand Surges

In 2023, real estate purchases by foreign buyers, which account for up to 85% of all transactions, reached an all-time high of €3 billion, following increases of 68% in 2022 and 34.4% in 2021. The Golden Visa Program, which offers residency to non-EU citizens who purchase or rent property worth over €250,000, has been a major draw for foreign investors. However, in August 2023, the required investment for a Golden Visa in popular areas was doubled to €500,000.

Despite this increase, foreign investment remains strong. Between August and December 2023, 3,626 investors submitted Golden Visa applications, a 60% increase from the same period in 2022. The government has announced further changes to the program, raising the minimum investment to €400,000 in some areas and €800,000 in others by August 2024.

Foreign Investment in Greek Real Estate

Foreign direct investment (FDI) in Greek real estate continues to rise. In 2023, net FDI increased by 8% to €2.13 billion, following a 68% increase in 2022 and a 34.4% rise in 2021. The sector now accounts for 20% to 35% of total FDI in Greece.

The Golden Visa Program has played a key role in this surge. Since its inception in 2013, the program has attracted over 31,000 applicants, generating more than €2.6 billion in investment. The majority of applicants come from China (63.6%), followed by Turkey, Russia, Lebanon, and Egypt.

Tax Incentives and Government Initiatives

Several government measures have boosted Greeces housing market:

• Suspension of VAT: The suspension of VAT on new building permits, announced in 2019, has been extended until the end of 2024, encouraging new construction.
• ENFIA Property Tax Reductions: The government reduced ENFIA, the single property tax, with an average reduction of 10% applied in 2020. In 2022, a further 13% cut was announced.

Construction Activity

Residential construction has been growing for seven consecutive years. In 2023, building permits rose by 8.1%, driven by the government’s VAT suspension on new builds.

A Resilient Real Estate Market

Greeces real estate market is poised for continued growth, fueled by strong foreign investment, supportive government policies, and a steadily improving economy. Although rising mortgage rates and increasing demand may put pressure on local affordability, the overall outlook remains positive. With ongoing construction activity and investor interest, the sector is expected to remain a key driver of Greece’s broader economic performance.