Real estate: Positive outlook for the sector in 2024

It is growing at a faster rate in Greece than in the rest of Europe, making up for lost ground after the crisis.

The prospects for development and investment in the Greek real estate market remain consistently positive, despite the significant deterioration of the international climate in the sector. According to the latest annual survey Emerging Trends in Real Estate, carried out by PwC on behalf of the Urban Land Institute (ULI), the Athens market maintains its position in the global ranking (23rd among 30 markets), based on the estimates of professionals of the sector for its prospects in 2024. Taking into account that in recent years the score of each market in the final ranking is also determined based on its size, the position of Athens is judged to be satisfactory.

An executive of the real estate sector, who participated in this year's research, emphasizes that "the Greek market is growing at a faster rate than the rest of Europe, making up for lost ground after a prolonged period of economic crisis." On the other hand, there are experts who express their concerns about the extreme climatic conditions that hit Athens in 2023 (fires, heatwave, etc.).

As Mr. Tasos Kotzanastasis, executive member of the global management committee of ULI, states, "the Greek market has remained stable regarding its prospects for 2024. However, it would be good not to have special expectations at least for the next 12 months, as liquidity is very low, which is also reflected in the lower volume of transactions recorded."

Of course, despite its small size, the Greek market is also affected by the negative international situation. According to this year's PwC survey, rising interest rates, skyrocketing construction costs, high inflation and the huge challenge of adapting the real estate market to the demands of ESG policies on environmental and social footprint are the biggest challenges. "The next year is considered particularly difficult, as apart from the challenges of adapting to an environment of high interest rates and high construction costs, the geopolitical factor has now been added," notes Mr. Kotzanastasis.

In this context, the sectors – on a pan-European level – that are expected to gather the most investment interest are not the "traditional" ones, i.e. office buildings, or shopping centers/stores. On the contrary, the greatest demand is found in categories such as residences, student residences, centers for assisted transfer and care/accommodation for the elderly, as well as logistics, which continue to maintain their momentum, both in Greece and abroad. However, although the prospects for 2024 are considered negative overall, it is positive that there is no oversupply of real estate that existed e.g. during the financial crisis that hit the world economy in 2008-2009. This means that the properties that will be put on the market, due to financial pressures of their owners (distressed), will be limited. On the other hand, a negative factor for completing more transactions is the fact that selling prices have not yet adjusted downwards, which all industry experts expect.