Market in Depth

Greek urban areas rose by 8.35%

Lalaine C. Delmendo | January 26, 2022

Greek house prices continue to rise strongly, despite the economic repercussions brought by the COVID-19 pandemic. In Greece's urban areas, house prices rose by 8.35% during the year to Q3 2021, sharply up from the previous year's 3.91% growth and the second best performance since Q1 2007, according to the Bank of Greece. When adjusted for inflation, house prices rose 6.41%. Quarter-on-quarter, house prices in urban areas were up by 2.73% in Q3 2021 (2.94% in real terms).

This strong growth was mainly seen in the major cities:
  • Athens led with an annual house price increase of 9.76% in Q3 2021 (7.8% in real terms), up from the previous year's 6.83% growth. During the latest quarter, house prices rose by 2.78% (3% in real terms).
  • In Thessaloniki, the country's second largest city, house prices rose by 8.74% (6.8% in real terms) during the year to Q3 2021, its biggest y-o-y growth since Q2 2007. Quarter-on-quarter, prices increased 3.23% (3.45% in real terms) in Q3 2021.
  • In other cities (excluding Athens and Thessaloniki), house prices rose by 5.94% (4.05% in real terms) during the year to Q3 2021, in contrast to a y-o-y fall of 0.19% a year earlier. During the latest quarter, prices increased 2.63% (2.84% in real terms) in Q3 2021.

Greece had a great house price boom during the early-2000s. Real estate agents reported 30% to 40% annual price rises for properties near the sea in 2004. In Athens, house prices rose 11.2% in 2006, before slowing to 6.2% in 2007.

When Greece's dramatic economic crisis hit, residential property prices began falling dramatically. Between 2007 and 2017, Greece's GDP per capita fell by a quarter, and house prices in Athens fell by 44.5% (-49.5% in real terms).  Here are the house prices in Athens in the past decade:

Greece finally emerged from recession in 2017 – growing by 1.5% in 2017 and by 1.9% annually in 2018 and 2019. But the pandemic dragged the economy back to recession, with real GDP shrinking by a huge 9% during 2020.

Fortunately, things are now improving, with the economy projected to expand by 7.1% this year and by another 5.2% in 2022, according to figures from the European Commission.

The housing market started to recover in 2018, having fallen 42.5% (-47.7% in real terms) from 2007 to 2017. House prices in urban areas rose by 3.51% in 2018 and by another 7.56% in 2019. Athens had even stronger house price growth of 11.57% (11.47% inflation-adjusted) in 2019 and 6.23% (8.45% in real terms) in 2020, despite the pandemic.

Greece house prices
Rapid urbanization has led to a sharp dichotomy between urban and rural areas. Based on the 2011 census, more than 35% of the housing stock is vacant, mostly in rural areas. These units are typically dilapidated, or in need of total rehabilitation.

On the other hand, dwelling units in urban areas are amongst the most crowded in Europe. Most children continue to live with their parents after they enter adulthood. The reduction of notary fees from 1.2% to 1% of real estate's value was clearly insufficient in reducing the high transaction cost, which adds to the burdens of first-time homebuyers.

Analysis of Greece Residential Property Market »

Rental Yields

Rental returns are moderate to good in Greece

The Gross rental yield is the rent the landlord will earn - before taxation, vacancy costs, and other costs - compared to the property's purchase price.

In central Athens, specifically Athens Historical Center and Kolonaki - Lykavittos, gross rental yields range from 3.9% to 5.8%.

Athens suburbs' gross rental yields are moderate to good, ranging from 2.7% to 5.7%. In Glyfada, for a 120 square metre (sq. m.). apartment, you will typically get a rental yield of 5.7%, which is surprisingly good. Many expats favored living in this area because this is a seaside suburb and has access to variety of restaurants, cafes, pubs and shopping districts. In Voula, where most locals live and which is considered an ideal overseas property destination, you can earn a rental yield of 5.69% for a 120 square metre (sq. m.) apartment. Voula is richer than Glyfada. However, you will probably only earn around a 3.38% rental yield for a 120 square metre (sq. m.) for an apartment in Vouliagmeni.

In Kiffisia, one of the most expensive suburbs in Northern Athens, the gross rental yield can be surprisingly high. A 50 square metre (sq. m.) apartment can yield 8% and a 120 square metre (sq. m.) apartment can yield 7.2%.

Smaller apartments tend to have higher rental yields than larger ones.

How much do apartments cost?

Central Athens’ average apartment price ranges from EUR 3,000 to EUR 4,000 per square metre (sq. m.), while in the suburbs of Athens, apartments cost around EUR 3,000 to EUR 7,000, relatively more than in the centre. Apartments in Crete cost around EUR 1,000 to EUR 4,000 per square metre (sq. m.), much lower than in Santorini, which costs approximately EUR 5,000 per sq, m. Rental yields are moderately lower here than in Athens Center and suburbs.

Round trip transaction costs are quite high for residential property in Greece. See our Residential transaction cost analysis for Greece.

Read Rental Yields »

Taxes and Costs

Income tax is moderate to high in Greece

Rental Income: Rental income is taxed at progressive rates, from 9% to 44%.

Capital Gains: Capital gains realized from the sale of property held for less than 5 years are taxed at a flat rate of 15%.

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, from 9% to 44%.

Read Taxes and Costs »

Buying Guide

Total transaction costs are moderate in Greece

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

Tenant protection laws are neutral in Greece

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 »


Economy improving, unemployment continues to fall

After four years of surpluses, Greece recorded a huge budget deficit in 2020, equivalent to about 10.1% of GDP, due to massive stimulus packages to mitigate the impact of the pandemic. The shortfall is expected to remain high at 9.9% of GDP this year, according to the European Commission.

As a result, the country’s debt surged to about 206.3% of GDP in 2020, sharply up from 180.9% in 2019 and 184.8% in 2018. Public debt is projected to fall slightly to 202.9% of GDP this year.

Greece gdp inflation
However the economy is projected to expand by 7.1% this year, after shrinking by a huge 9% during 2020 due to the pandemic, according to figures from the European Commission.

“The recovery of the Greek economy is gaining traction, primarily driven by domestic demand and the better-than-expected tourist season,” said the European Commission.

“The impact of the pandemic is expected to gradually soften, while the accommodative fiscal and monetary policy, coupled with the strong boost from the Recovery and Resilience Plan, are set to sustain the momentum going forward.”

Unemployment fell to 13% in September 2021, down from 13.9% the previous month and 16.5% a year earlier, according to the Hellenic Statistical Authority - Greece’s lowest in more than 11 years but one of the EU's highest.

Inflation accelerated to 4.8% in November 2021, the highest level since January 2011, according to the Hellenic Statistical Authority. Inflation is projected at 0.1% in 2021, from -1.3% in 2020 and o.5% in 2019, by the European Commission.