Housing prices up 2.5 pct; Greece looks for ways to cool down market

March 5, 2019

Greece's housing market continued to recover in the fourth quarter of last year with apartment prices advancing 2.5 percent, according to data from the Bank of Greece, the country's central bank.

 

Figures show that real estate prices rose every quarter of last year (Q1-0.3%; Q2-1%; Q3-2.1%) in step with a recovering economy.  The average price increase for 2018 reached 1.5 percent. The growth is providing some relief in the sector where prices had plummeted by more than 40 percent during Greece's nine year economic crisis. 

 

But it looks like the price hikes are happening too fast for the country's fragile economy.  

 

The latest snapshot of the property sector comes amidst growing talk of the government implementing restrictions on homes offered for short term rental, in a trend that has been fueling demand for real estate but also pushing rents higher

 

Rising rents in Greece are not being matched by anemic economic growth as jobless rates remain high and wage growth minimal.

 

Last week, Greece's cabinet decided to set up a joint ministerial committee that will oversee the implementation of restrictions on the Airbnb market that have been voted in by lawmakers but yet to be implemented.

 

In the fourth quarter of last year, apartment prices in Athens jumped 4.2 percent, versus an advance of 2.1 percent in northern Greece's Thessaloniki. Newer homes (less than five years old) proved to be more popular among buyers, showing a 2.7 percent increase in prices against an advance of 2.3 percent in older properties.

 

Real estate brokers have been reporting much higher price hikes in pockets of the market, such as central Athens and the capital's southern beach stretch. These areas are popular with investors renting their property on Airbnb-type platforms and among non EU nationals looking to clinch a residency permit in Greece via its Golden Visa program.

 

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