Greece Residential Real Estate Market Analysis 2023

Greek house prices continue to rise strongly, amidst increasing demand from foreign buyers and continued economic growth in the country. In Greece’s urban areas, house prices rose strongly by 11.32% during the year to Q3 2022, following year-on-year increases of 10.26% in Q2 2022, 10.35% in Q1 2022, 10.81% in Q4 2021 and 9.4% in Q3 2021, according to the Bank of Greece. In fact, it was its best performance since Q4 2006.

However, when adjusted for inflation, house prices actually dropped slightly by 0.31% y-o-y in Q3 2022. The huge difference between the nominal and real figures is due to high inflation, which is expected to reach 10% this year, sharply up from an annual average of 0.2% from 2011 to 2021.

Greece’s house price annual change

On a quarterly basis, house prices in urban areas increased 4% (3.78% in real terms) during the latest quarter.

This strong growth was mainly seen in the major cities:

  • Athens led with an annual house price increase of 13.02% in Q3 2022 (1.21% in real terms), up from the previous year’s 10.83% growth. During the latest quarter, house prices rose by 4% (3.78% in real terms).
  • In Thessaloniki, the country’s second-largest city, house prices rose by 11.07% (-0.53% in real terms) during the year to Q3 2022, its biggest y-o-y growth since Q1 2007. Quarter-on-quarter, prices increased by 3.53% (3.31% in real terms) in Q3 2022.
  • In other cities (excluding Athens and Thessaloniki), house prices rose by 9.39% (-2% in real terms) in Q3 2022 from a year earlier, up from the previous year’s 6.85% y-o-y increase. During the latest quarter, prices increased by 2.99% (2.77% in real terms) in Q3 2022.

Demand from foreign homebuyers is rising strongly. In the first three quarters of 2022, the total value of real estate purchases by foreign buyers, which accounts for 80% to 85% of all real estate purchases in Greece, soared by 60.2% y-o-y to €1.28 billion, based on central bank figures. For the whole year of 2022, foreign buyers’ property purchases are expected to reach €1.7 billion, surpassing the €1.45 billion recorded before the Covid-19 pandemic.

Foreign investors have been attracted to Greece, mainly due to the Golden Visa Program, which offers residency to non-EU investors purchasing or renting property worth over €250,000.

Greece price dwellings index

The housing market is also buoyed by the country’s strong economic performance. After expanding by a robust 8.4% during 2021, the Greek economy is projected to grow by another 6% this year, as the government’s National Recovery and Resilience Plan provides significant support to the economy. The economy contracted by a huge 9% in 2020 due to the adverse impact of the pandemic.

Foreign interest in Greek tourism property increasing again

The property market accounts for about 25% to 35% share of total FDI in Greece annually. During 2021, net foreign direct investment (FDI) for the purchase of properties rose sharply by 34.4% y-o-y to €1.18 billion, following an almost 40% decline in 2020, as economic activity returns to its pre-pandemic levels.

Greece fdi residential rents

In the first three quarters of 2022, net FDI in real estate reached €1.28 billion, up by a whopping 60.2% compared to the same period last year, according to the Bank of Greece.

Before the Covid-19 pandemic, foreign investment in real estate in Greece had been rising strongly. Net FDI for real estate surged by 45.3% in 2016, 86.5% in 2017, 172.1% in 2018, and another 28.5% in 2019.

According to a 2022 Ernst & Young investment report, Greece remains resilient and attractive to foreign investors, despite the uncertainty of the international environment. Based on data released by the European Investment Monitor (EIM), Greece attracted 30 FDI projects last year, fewer than in 2020 but remains the country’s second-best showing since 2000.

The total investment projects in 2020-21 accounted for about 24% of total FDIs over the last 22 years, according to the EY report.

Greece visa application

Part of this is due to the Golden Visa Program. The Golden Visa program was launched in 2013 to revive the housing market from a prolonged slump. It offers residency to non-EU investors purchasing or renting property worth over €250,000, similar to Hungary, Spain, and Portugal. The plan is valid for five years and is open to renewal. From 2014 to 2021, 9,610 main applicants received their Golden Visa in Greece. From its inception to December 2021, a total of 28,767 Greek Golden Visa permits were granted to the main applicants and their dependents, which yielded a total investment of more than €2.6 billion into Greece.

The highest number of applicants came from China, with a total of 6,405 Golden Visa applications, followed by Turkey (618 applications), Russia (596 applications), Lebanon (304 applications), and Egypt (250 applications).

Measures to boost the housing market

Aside from the Golden Visa program, several other measures introduced by Prime Minister Kyriakos Mitsotakis have buoyed the housing market recently:

  • Suspension of VAT payments on new building permits: Mitsotakis announced in October 2019 a suspension of VAT payments on any new building permits and unsold properties built after January 1, 2006. The suspension originally runs from December 12, 2019, to December 31, 2023. But in September 2022, Mitsotakis announced an extension of the tax relief for another year – until the end of 2024.
  • Tax relief for real estate: the government ended real estate tax in 26 islands in 2020.
  • Reduction of the single property tax (ENFIA): The ENFIA for individuals was reduced in 2019 - 30% reduction for properties valued up to €60,000; 27% for those valued up to €70,000; 25% for those valued up to €80,000; 20% for those valued up to €1 million; and 10% for properties valued more than €1 million. A further 10% reduction, on average, was applied to all property owners from the year 2020. Then in February 2022, Mitsotakis announced a new 13% reduction in the ENFIA.

For 2022, the main rates of the new ENFIA are as follows:

Property zone rates Old ENFIA New ENFIA
€751 to €1,500 €3.70 per sq. m. €2.80 per sq. m.
€1,501 to €2,500 €4.50 to €6 per sq. m. €3.70 per sq. m.
€2,501 to €3,000 €7.60 per sq. m. €4.50 per sq. m.

“Under the new rules eight out of ten property owners will pay an even lower rate,” Mitsotakis said. “A fair share will pay the same contribution, while a small minority, around 6 percent, will see a reasonable increase.”

High property taxes discouraged many potential buyers because property taxes had increased seven times since the global financial crisis.

Reducing taxes has been one of the priorities of the Mitsotakis government.

Housing boom and bust

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:


Year Nominal Inflation-adjusted
2008 -0.77 -3.57
2009 -4.21 -6.04
2010 -5.83 -10.40
2011 -8.00 -10.49
2012 -12.91 -13.88
2013 -11.45 -9.47
2014 -6.80 -5.04
2015 -4.99 -4.41
2016 -0.91 -0.47
2017 -0.45 -1.27
2018 4.67 3.53
2019 11.86 11.75
2020 6.23 8.45
2021 11.61 6.86
Sources: Bank of Greece, Global Property Guide

Greece finally emerged from the recession in 2017 – growing by 1.1% in 2017, 1.7% in 2018, and 1.8% in 2019.

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 7.46% in 2019. Athens had even stronger house price growth of 4.67% and 11.86% over the said two years.

And, despite the fact that the pandemic dragged the economy back to recession, with real GDP shrinking by a huge 9% during 2020, the housing market remains resilient. House prices in Athens rose by 6.23% (8.45% in real terms) y-o-y in 2020.

Fortunately, the overall economic conditions have since improved, with the economy growing strongly by 8.4% in 2021, mainly driven by the easing of pandemic-related restrictions and the low-base effect from the prior year. The Greek economy is projected to expand by another 6% this year, according to figures from the European Commission.

Last year, house prices in Athens soared by 11.61% (6.86% in real terms) but prices in urban areas remained more or less steady.

Rapid urbanization has led to a sharp dichotomy between urban and rural areas. Accordingly, 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.

Moderate rental yields; falling rents

In central Athens, specifically Athens Historical Center and Kolonaki - Lykavittos, gross rental yields range from 2.80% to 6.32%, according to a Global Property Guide research conducted in November 2022.

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

In central Athens, the average price of two-bedroom apartments is around €630,000, while in the suburbs of Athens, two-bedroom apartments cost around €130,000 to €240,000, relatively less than in the center. Two-bedroom apartments in Crete cost around €190,000.

Greece homeownership rate

Rents have been generally falling in the past decade. From 2010 to H1 2022, rents in Greece plunged by about 24%, the worst performance in the European Union, according to Eurostat. Among the 27 EU member states, only Greece and Cyprus (with a minimal decline of just 0.2%) recorded rent declines over the period.

Currently, the monthly rents for two-bedroom apartments in Athens range from €600 to €2,200, based on the Global Property Guide research. In Thessaloniki, a similar apartment rents for about €445 to €700 per month.

Around three-fourths of Greeks live in owned homes, with a homeownership rate of 73.3% this year, down from 73.9% in 2021 and 75.4% in 2020, according to Eurostat. The rental market comprises about 20% of the dwelling stock.

Mortgage interest rates rising

Mortgage interest rates in Greece are now rising, following the move of the European Central Bank (ECB) to hike its key rates to rein in inflationary pressures. In December 2022, the ECB raised its repo rate further by 50 basis points to 2.5%, its fourth consecutive rate hike in just five months, when the repo rate was at a record 0%.

Greece interest rates

For new housing loans with a floating rate or up to one-year initial rate fixation (IRF), which accounts for more than 77% of all new housing loans drawn this year, the average interest rate was 4% in October 2022, sharply up from 2.43% in the same month last year, according to the Bank of Greece. Since the second half of 2009, 70% or more of new housing loans have had interest rates adjustable at least annually.

For new housing loans with IRF of over 5 and up to 10 years, the average interest rate fell slightly to 3.24%, from 3.38% a year ago.

For outstanding housing loans with a maturity of 1-5 years, the average interest rate increased slightly to 4.19% in October 2022, from 4.06% a year ago. Likewise, the interest rate for loans with a maturity of over 5 years rose from 1.92% to 3.02% over the same period.

The mortgage market continues to shrink

The size of the mortgage market continues to shrink, amidst rising interest rates. During 2022, the mortgage market was estimated to have contracted to just about 14% of GDP, down from 16.8% of GDP in 2021 and 39.5% of GDP in 2012.

Greece housing loans

Since the global financial crisis, cash-basis property transactions have accounted for about 80% of all transactions with only 20% relying on bank loans, according to the Bank of Greece, resulting in a continuous decline in the size of the mortgage market.

In the first ten months of 2022, new housing loans increased 14.2% y-o-y to €577.5 million, according to the Bank of Greece. Yet this rise is nothing compared to the average of €14.17 billion in new housing loans recorded annually in 2005-08 and €5.4 billion annually in 2009-13.

Greece new housing loans

As of November 2022, total housing loans outstanding fell sharply by almost 20% to € 29.56 billion from a year earlier, following declines of 33.3% in 2021, 12.6% in 2020, and 7.2% in 2019.

Construction activity showed mixed results

Residential construction in Greece rose continuously in the past five years, after almost a decade of declining activity. In 2021, building permits surged by 26.8% y-o-y to 23,807 units, following annual growth of 8.9% in 2020, 13.5% in 2019, 10.1% in 2018, and 9% in 2017. Despite this, it remains far lower than the 70,000 to 80,000 permits issued annually from in 2004 to 2007.

The rise in construction activity in recent years has been buoyed by Mitsotakis’ suspension of VAT on new properties and on unsold properties built after January 1, 2006. The suspension originally runs for four years, between December 12, 2019, and December 31, 2023. However recently, Mitsotakis announced an extension of the tax relief for another year – until the end of 2024.

Greece number of permits

The VAT exemption is also applicable to situations known as “antiparochi”, where owners provide land to builders in exchange for a number of future apartments.

However this year, construction activity has been showing mixed results, amidst surging inflation and heightened global economic uncertainty. During the first three quarters of 2022 (based on figures from the Hellenic Statistical Authority):

  • Number of permits: 17,654 units, up by 2.4% from a year earlier
  • Floor space: 3.77 million sq. m., down by 14% from a year earlier
  • Volume: 16.94 million cu. m., down by 5.8% from a year ago

Why Greece had eight years of economic crisis

When the euro was first introduced in 1999, Greece was left out because of its high budget deficit and inflation. Embarrassed by the isolation, Greece appeared to clean up its act and fix its finances and macroeconomic fundamentals. By January 2001, it was able to adopt the euro as its official currency, bringing access to cheap funds and allowing the Greek government to pump-prime the economy.

Greece budget deficit debt

In November 2004, however, Greece admitted that it had fudged its figures to gain entry into the Eurozone. Since 1999 its budget deficit had never been within the EU limit of 3% of GDP. It was also revealed in early 2010 that Greece had paid Goldman Sachs and other banks to hide the true amount of its debt and borrowing.

When it became clear that the spending spree was unsustainable, creditors and the EU together with other international institutions such as the IMF demanded that Greece cut its spending, including wages and pensions. This was met with severe resistance, manifested in public protests and rioting.

After assuming office in October 2009, Prime Minister George Papandreou revealed that the deficit was much higher than the previous government had claimed. He vowed to downsize the public sector and fight rampant tax evasion.

In May 2010, European leaders and the International Monetary Fund (IMF) agreed to a three-year, €110 billion bailout for Greece which was tied to additional austerity measures. These moves lead to a 5.5% economic contraction in 2010, following a decline of 4.3% in 2009. Violent protests, rallies, and strikes followed.

The economy continued to contract in the following years, with real GDP declines of 10.1% in 2011, 7.1% in 2012, and 2.5% in 2013.

The continued demand for cuts and more cuts in the face of already-high levels of public misery led to the rise of the radical leftist party Syriza, a coalition of diverse elements. Its leader, Alexis Tsipras, led Syriza to victory and Syriza assumed office on January 26, 2015.

Despite Tsipras having earlier pledged “No more bailouts, no more submission, no more blackmailing,” Greece and its creditors agreed on a third bailout worth €86 billion in August 2015, imposing further spending cuts. As part of the deal, the government passed a pension and tax reform bill in May 2016, which aimed to raise taxes and increase social security and pension contributions for most Greeks to bring about €5.4 billion in budget savings.

Greece exited the bailout program, finally!

The economy started to recover in 2017, registering real GDP growth of 1.1%. In August 2018, Greece finally exited its eight-year bailout program. But it remains subject to scrutiny from its European creditors. The economy grew by 1.7% in 2018 and by another 1.8% in 2019.

“We have had eight very difficult years, often very painful years, where we have had three successive programs. But now Greece can finally turn the page in a crisis that has lasted too long,” said Pierre Moscovici, the European commissioner for economic and financial affairs. “The worst is over.”

In the July 2019 elections, the centre-right New Democracy party won a landslide victory receiving 39.7% of all votes, defeating Tsipras’ incumbent leftwing Syriza party. Ironically the defeated leftists had improved government finances with surpluses of 0.2% of GDP in 2016, 0.6% in 2017, 0.9% in 2018, and 1.1% in 2019. Public debt also dropped to 180.5% of GDP in 2019, from 186.2% in 2018.

New Democracy’s leader, Kyriakos Mitsotakis, became the new prime minister in 2019. The New Democracy’s victory was mainly attributed to Mitsotakis’ ability to charm centrists, to the conservatives’ ability to obtain votes from Golden Dawn by taking a tough stance on immigration, and on an accord struck by Tsipras resolving a long-running name row over Macedonia, Greece’s neighbor to the north.

Improving public finances, robust economic growth

After four years of surpluses, Greece recorded a huge budget deficit in 2020, equivalent to about 10.2% of GDP, due to massive stimulus packages to mitigate the impact of the pandemic. The shortfall fell to 7.5% of GDP last year and is expected to narrow further to 4.1% of GDP in 2022, according to the European Commission (EC).

The country’s debt stood at 193.3% of GDP in 2021, down from a recent record of 206.3% of GDP in 2020, but remains far higher than the 180.7% of GDP seen in 2019 before the Covid-19 pandemic. Public debt is projected to fall to about 171.1% of GDP this year, based on EC estimates.

Greece gdp inflation

After expanding by a robust 8.4% during 2021, the Greek economy is projected to grow by another 6% this year, as the government’s National Recovery and Resilience Plan provides significant support to the economy. The economy contracted by a huge 9% in 2020 due to the adverse impact of the pandemic.

“The Recovery and Resilience Plan will provide notable support to the economy, while the broad-based government support measures to mitigate the impact of high energy prices are set to partly cushion the impact of high inflation on businesses and on households’ real disposable income,” said the European Commission. “These measures will continue until the end of 2023 without, however, hindering primary surpluses in the coming years.”

The seasonally-adjusted unemployment rate fell to 11.6% in October 2022, down from 12% in the previous month and 13.3% a year earlier, according to the Hellenic Statistical Authority – Greece’s lowest in more than 12 years but still one of the EU’s highest.

Greece unemployment

There were about 542,900 unemployed people in Greece in October 2022, down from 621,400 unemployed in the same period last year.

Overall inflation eased to 8.5% in November 2022, down from 9.1% in the previous month and the lowest level since February. But it remained far above the ECB’s target of 2%. Inflation is projected to surge to 10% for the full year of 2022, according to the European Commission, sharply up from an annual average of 0.2% from 2011 to 2021.