Properties in Greece

After seven years of falling house prices, things are turning around, thanks to improving economic conditions.

In Greece’s urban areas, house prices rose by 2.51% during the year to Q3 2018, the highest annual increase in house prices since Q1 2008, according to the Bank of Greece. When adjusted for inflation, house prices increased 1.53%. Quarter-on-quarter, house prices in urban areas were up 1.2% in Q3 2018 (2.01% in real terms).

This improvement was also seen in the major cities:

• Athens led the country’s housing market with an annual house price increase of 3.71% in Q3 2018 (2.71% in real terms). In fact, it was the capital’s best performance since Q4 2007. During the latest quarter, house prices rose 1.65% (2.48% in real terms).
• In Thessaloniki, the country’s second largest city, house prices rose by 1.9% (0.9% in real terms) y-o-y in Q3 2018, in contrast to last year’s 1.3% annual fall – the highest growth since Q1 2008. Quarter-on-quarter, prices increased slightly by 0.5% (1.3% in real terms) in Q3 2018.
• In other cities (excluding Athens and Thessaloniki), house prices rose 1.2% (0.2% in real terms) during the year to Q3 2018, an improvement from y-o-y decline of 0.5% a year earlier. In a quarterly basis, prices increased 0.6% (1.4% in real terms) in Q3 2018.

Greek residential property prices have fallen by 42.7% (-46.3% in real terms) from 2008 to 2017.

During the first eight months of 2018, the number of residential property transfers recorded at the Athens land registry surged by 59.6% from a year earlier.

During the first nine months of 2018, the total number of construction permits rose by 9% to 10,817 units from the same period last year, according to Hellenic Statistical Authority. But it remains far below the 70,000 to 80,000 permits issued annually from in 2004 to 2007.

To revive the housing market, the Greek government recently offered residence to non-EU investors purchasing or renting property worth over €250,000. The residence plan is similar to measures adopted by Hungary, Spain and Portugal. The plan is valid for five years and is open to renewal.

However, high property taxes in Greece continue to discourage demand. In fact, property taxes have increased seven times since the global financial crisis. In 2018, the 6.3 million property owners in Greece are being required to pay a total of €3.15 billion in property tax (ENFIA), up from €500 million in 2009. Rental taxes have also increased. For the first €12,000 annual rent revenues, the tax rate is 15%, up from 11% until 2015. For rent revenues between €12,000 and €35,000 per year, the rate soars to 35%.

The Greek economy grew by around 2% in 2018, according to the European Commission (EC) – an improvement from last year’s 1.5% expansion and the highest growth since 2007. After a short-lived recovery in 2014, Greece’s economy returned to recession in 2015, with GDP contracting by 0.3% and by another 0.2% in 2016, amidst the imposition of capital controls and the closure of most of its banks. Before this, the country’s real GDP had contracted by 3.2% in 2013, 7.3% in 2012, 9.1% in 2011, 5.5% in 2010, 4.3% in 2009 and 0.3% in 2008.

 

The EC expects the Greek economy to grow by 2% this year but the International Monetary Fund (IMF) is more optimistic, projecting 2.4% growth.

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