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Last Updated: Mar 25, 2017




The Greek economy is expected to grow by 2.7% this year and by another 3.1% in 2018, mainly due to an upsurge in tourism. And after seven years of falling house prices, things are turning around. 

In Greece’s urban areas, house prices dropped by just 0.46% during 2016, the lowest annual fall in house prices since 2009, according to the Bank of Greece. When adjusted for inflation, house prices actually rose slightly, by 0.03%.

This improvement was also seen in the major cities:
  • In Athens, the average price of apartments fell slightly by 0.35% (but increased by 0.15% in real terms) during 2016, after declines of 4.99% in 2015, 6.8% in 2014, 11.45% in 2013, 12.91% in 2012, and 8% in 2011, according to the Bank of Greece.
  • In Thessaloniki, the country’s second largest city, house prices fell by 0.5% (i.e., were unchanged when adjusted for inflation) in 2016.
  • In other cities (excluding Athens and Thessaloniki), there was a slight house price drop of 0.6% (-0.1% in real terms) in 2016, sharply down from a y-o-y decline of 5% in 2015 and the lowest annual decline since 2008.

Greek residential property prices have fallen by 42% (-45.2% in real terms) from the peak year of 2008.

Despite the slight improvement, activity remains amazingly depressed. The number of housing transactions in Greece has fallen by 72% since 2008, according to a PwC report released in October 2016.

Residential construction continues to fall, with building permits falling 6.9%to only around 12,500 units in 2016, a striking contrast to the 70,000 to 80,000 permits issued annually from in 2004 to 2007. In Athens, building permits dropped 1.4% in 2016 from a year earlier.

Greek house prices are expected to increase by a meagre 0.6% every year from now on, according to PwC. “The Greek real estate market will recover at a slower pace than the Greek economy unless policies to boost demand and reduce oversupply are implemented,” according to PwC.

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.

Greece house pricesHowever, the very high property taxes in Greece continue to discourage demand. In fact, property taxes have increased seven times since the global financial crisis. In 2016, Greeks paid a total of €3.5 billion in property taxes, up from €3 billion in 2014 and from just €500 million in 2009.

The Greek economy grew by around 0.3% in 2016, according to the European Commission – an upward revision from its earlier estimate of a 0.3% contraction.After a short-lived recovery in 2014, Greece’s economy returned to recession in 2015, with GDP contracting by 0.2%, amidst the imposition of capital controls and the shutting down 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, according to the IMF.   The economy is expected to grow by 2.7% this year and by another 3.1% in 2018.

Analysis of Greece Residential Property Market »


RENTAL YIELDS
Last Updated: Jul 27, 2016



In our latest survey, the average price per square metre (sq. m.) in Central Athens ranges from around EUR 2,700 to EUR 3,500.

In the suburbs of Athens, i.e., Ekali, Kifisia, Psychiko, Glyfada, the average price per sq. m. of apartments ranges from around EUR 2,100 to EUR 2,400, while houses cost around EUR 3,200 per sq. m.

We take our prices with a pinch of salt since they are based on a small sample. We are more confident about our yields figures. Gross rental yields on 120 sq. m. central Athens apartments are at about 4.1%. This is a rather moderate yield. Larger apartments yield less.

Apartments in Crete cost around EUR 1,400 per sq. m. while villas cost around EUR 2,500 per sq. m. Yields are lower here than in Athens, at least for apartments (for which we had yields research last year, but not this year) at around 3%.

Monthly rents per sq. m. in Athens range from around EUR 7 to EUR 10.5 per sq. m.

In Crete, monthly rents per sq. m. of apartments range, using the figures we had last year, from around EUR 4 to EUR 6 per sq. m.

When buying property, take into account the fact that round trip transaction costs are quite high in Greece.  See our Residential transaction costs analysis for Greece and Residential property transaction costs in Greece, compared to the rest of Europe.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Jan 25, 2016



Rental Income: Rental income is taxed at progressive rates, from 10% to 33%.

Capital Gains: Capital gains realized from the sale of property held for less than 5 years are taxed at a flat rate of 20%.

Inheritance: Inheritance tax is levied at different rates depending on the relationship between the deceased and the beneficiaries.

Residents: Residents pay taxes on their worldwide income at progressive rates.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Jan 23, 2015



The total roundtrip transaction cost, i.e., the cost of buying and selling a property, ranges from 6.88% to 11.04%. Transfer tax is levied at a flat rate 3% as of 01 January 2014.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: May 30, 2006



Greece houses for sale and rentRent: Rents are freely negotiable between the tenant and the landlord. There is no legal limit on the deposit.

Tenant Security: All residential rentals have a minimum legal duration of three years. If a contract for a lesser period is negotiated, the three years period applies to the landlord, but not to the tenant. A contract for three years or longer terminates automatically at the end of the contract period, without need for notice.


Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Mar 25, 2017


Greek economy is now improving

Greece gdp inflationThe Greek economy grew by around 0.3% in 2016, according to the European Commission – an upward revision from its earlier estimate of a 0.3% contraction.The recovery is expected to continue this year with a projected real GDP growth rate of 2.7%, mainly due to an upsurge in tourism.

The economy is expected to grow further by 3.1% in 2018.

“We are at a turning point at which we can say, with certainty, that we are leaving the recession behind us,” says national economy minister GiorgosStathakis.

After a short-lived recovery in 2014, Greece’s economy returned to recession in 2015, with GDP contracting by 0.2%, amidst the imposition of capital controls and the shutting down 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, according to the IMF.

The budget deficit fell sharply to 1.1% of GDP in 2016, from 7.5% of GDP a year earlier, according to the European Commission. Greece is expected to have a 1.1% of GDP deficit this year, before finally achieving a budget surplus of 0.7% next year.

The national debt was 183.4% of GDP in 2016, from 159.6% of GDP in 2012 and 103.6% of GDP in 2006, according to the IMF.However, the country’s debt is expected to fall to 170.6% of GDP in 2018, according to the European Commission.

The nationwide unemployment rate stood at 23.4% in 2016, slightly down from 25% in 2015 but still far higher than the average of just 9.6% between 2001 and 2009. The jobless rate is expected to remain above 20% during the next two years.

Consumer prices in Greece are also rising gradually. Nationwide headline inflation stood at 1.3% in February 2017, up from 1.2% in the previous month and the highest rate since February 2012, according to the Hellenic Statistical Authority.







  • Moderate yields in Athens
  • Tenant-neutral rental market
  • Property is expensive
  • Rental income tax can be high
  • Moderate to high transaction costs
  • Weak economic performance
RESIDENTIAL PROPERTY FACTS
Price (sq.m): €2,716 For a 120 sq. m. property, usually an apartment.
Rental Yield: 4.17% For a 120 sq. m. property, usually an apartment.
Rent/month: €1,132 For a 120 sq. m. property.
Income Tax: 7.50% Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 8.84% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 15.00% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Neutral Rating is based on a detailed study of each country’s law and practice.

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