Projects boost outlook on Greek property; prices rising

Aerial photo of real estate -
Investors are “discounting positive expectations of an economic recovery," says the Bank of Greece.

A number of large scale infrastructure projects underway in Athens and other parts of the country are reshaping Greece’s real estate market, boosting confidence and prices in the sector, says the Bank of Greece, the country’s central bank.

In its recent monetary policy report, the bank said that 2021 will mark the property market’s gradual return to normality as infrastructure and development projects show up new opportunities in residential housing.

Despite the pressures of the housing market in 2020 and the beginning of 2021, the limited inflow of funds from abroad for real estate investments, the reduced number of house transfers, as well as negative business expectations in construction, the market is proving to be resilient, the bank says.

Investors are “discounting positive expectations of economic recovery and international demand for the Greek real estate market,” it added.

Key projects that have been moving ahead recently and seen having a significant impact on living conditions in those areas include as the construction of line 4 of the Athens metro that will add 15 stations to the underground train network. A project that has become even more urgent as the Greek capital continues to struggle with high air pollution levels, prompting the European Commission recently to take Greece to court due to excessively high levels of nitrogen dioxide (NO2).

The eight-billion-euro Elliniko investment at the former international airport is also seen as providing a major boost to the Athens Riviera, running along south of Athens, an area that is popular with foreign home buyers.

Key projects out of Athens that are being closely watched by real estate market investors, include the construction of a new international airport in Crete (Kastelli) and a 2 billion euro highway project stretching along the north coast of Crete, said to be one of the largest public works projects in Europe.

According to the latest data provided by the Bank of Greece, housing prices advanced 3.2 percent in the January to March period, picking up from a rate of 2.5 percent previously. In Athens, residential property prices gained 5.4 percent on an annual basis, versus 5.6 percent in the previous quarter.

Although mortgage lending from the country’s banks remains very tight, there has been a spike in buying interest for apartments, according to agents, helped by steps taken by the conservative government to boost investments and jobs in housing.