Real estate prices returned to pre-crisis levels

Real estate prices have returned to the levels of 2007, i.e. before the crisis, after the jump that has occurred in recent years. According to Babis Charalambopoulos, scientific advisor of Solum Property Solutions (real estate appraisal company) and honorary president of the Hellenic Appraisal Institute, as can be seen from the table below, in the area of Metropolitan Athens the price losses that occurred during the ten-year crisis, in Thessaloniki it is very close to the levels of 2007, while in the other regions they fall short by 15 to 20%.

 

The same picture emerges from the development of building permits, where since 2017 there has been an increase but at reasonable levels, as shown in the diagram below:

 

 

The main fears

The environment of the Balkans, the ongoing war in Ukraine but after October 8 and the serious issues in Israel and Palestine, which have an impact in the Eastern Mediterranean but also around the world, are risk factors whose extent and duration do not they are easy to determine and how likely they will affect the Greek real estate market.

Other factors that affect the real estate market are:

• Energy and transport costs

• The cost of construction

• The 'my house' program for housing young people aged 25 to 39

• The lack of a workforce willing to work in this sector

• The level of interest rates, which discourages interested parties as unaffordable

• The demographics of the country

• The disposable income of households combined with the rise in the cost of living

• The short-term lease

• The large number of closed apartments owned by banks or funds, either because their owners do not want to rent them because they may require significant sums to renovate. The number of apartments that have fallen into the public domain due to disclaimers of inheritance and are closed is also significant.

It is worth noting that the gradual removal of the population from villages and small towns and the search for housing in the areas of Athens, Thessaloniki or cities with many students or tourism has led to:

• In the increase of prices and rents in the areas of demand

• In the relative stagnation of prices in areas that have a population decrease, lack of industries and other productive activities

Serviced apartments are a modern modern product that meets the demand.

The new regulations in the short-term rental market will affect the rental landscape, but they should be balanced so as not to destroy this product, which was created in the years of the crisis, gave employment to many unemployed people and neither asked for nor received subsidies for the renovation and equipment of properties, as well as during the period of COVID 19.

The properties purchased with the 'golden visa' program have also played a significant role, especially in the Attica region and for the most part by Chinese. Already with the changes made regarding the minimum value of the property, we believe that part of the future buyers will turn to properties with a lower limit of €250,000.

The war in Israel
According to Mr. Charalambopoulos, the Israelis who have bought many properties in our country, mainly for investment purposes, now because of the war in their region, it is not certain whether and to what extent they will continue to do so, due to the unstable factors of of this crisis.

At the same time there began to be a demand for short-term rentals from Israelis who send some families here for the duration of the war.

Is this incalculable, at present how it will develop.

An important factor affecting the real estate sector is the upgrading and modernization of old buildings. In other words, there are many people who, not being able to buy a new apartment, buy an old one at a lower price, which they modernize and give it a new life. This solution is also compatible with standards related to environmental protection.

Which properties are in demand?
According to him, the demand for high-end offices remains strong while it is limited in low-end old properties.

Serious movement continues to exist in the logistics and hotel space, where many transactions and developments are taking place and many more are underway. These two real estate sectors are constantly on the radar of AEEAP and other investors. However, the number of hotels in Attica should be weighed by the hoteliers so that occupancy rates do not decrease.

Especially high-rise logistics, in up-to-date locations and green features, are in high demand.

The country house is in demand from abroad and to a much lesser extent from the Greek public. We notice that the saturation in Mykonos and Santorini, and the high price levels there, have turned buyers - investors to our other beautiful islands in the Aegean and the Ionian.
Even luxury properties (villas, etc.) in international destinations (Cyclades, Corfu, Crete, Rhodes, Attica coastline, etc.) meet satisfactory demand and record prices have been recorded in some cases.

However, the improvement of transport infrastructure and health services in these areas still remains a serious issue.

As Mr. Charalambopoulos states "in conclusion, 2023 is moving very satisfactorily for the real estate market, but we must all be alert for the future, due to the many volatile factors previously mentioned.

Investing in selected properties can be a smart move to hedge against inflation, but also for a return well above bank rates. Tourism is a Greek constant with very good prospects, but we must constantly monitor developments, improve, extend the season, develop more cruise, religious tourism, spa and retirement tourism. Our infrastructure (roads, airports, ports, hospitals and health centers, cleanliness, etc.) must be constantly improved because this will make our Greece a more attractive destination. Finally, at some point there must be a definitive solution to the issue of seaplanes, because so far we have noted many failures in this area".