2024 was a year of significant developments and challenges for the real estate market in Greece. Demand remained high, keeping prices at consistently high levels for another year. Lefteris Potamianos, CEO of Potamianos Real Estate Group, underlines that the market conditions today are shaped by several factors, which determine both the choices of buyers and the strategies of professionals in the sector.

Dynamics of demand and the impact on the market

Despite predictions of a decline in prices, property values in Greece have and will remain stable, with some areas continuing their upward trend, albeit at a reduced rate. The main reason is the imbalance between supply and demand. As Mr Potamianos believes, of particular interest is the low and middle-income category, which dominates the Greek market. Most Greek buyers are looking for properties up to 120 sqm, with a sales price of up to 400,000-450,000 euros. On the contrary, foreign investors show a preference for luxury holiday homes, at much higher prices and with more square meters. The demand from foreign investors further strengthens the market. Areas around Athens, such as the Saronic Gulf and Evia, are of particular interest for investment, with many sales of holiday homes.

Opportunities in Athens are now non-existent, says Potamianos, with costs per square metre ranging from 1,700 to 1,800 euros, even in areas traditionally considered more affordable, such as Patisia and Kypseli. The opportunities are now in the periphery.

Renovation as a factor of surplus value

The condition and quality of the property have become determinants of its value. Renovated properties are in high demand, as most buyers avoid older properties due to the cost and complexity of renovation work. “Renovation can add up to 20% to the value of a property, while its cost now exceeds 1,000-1,200 euros per square metre,” Potamianos says. However, the lack of sufficient labour for renovations, due to absorption from large development projects, coupled with the lengthy process, are disincentives to buy homes that are in poor condition.

Government intervention and management of bank-owned properties could provide a breathing space to the market. “The disposal of bank-owned properties could boost supply and lead to price stabilisation,” Potamianos said. He is referring to properties that have come into the possession of banks and are in the process of settling legal issues so that they can be put on the market, rather than properties that are going to auction. Programs such as “My House II” are expected to boost demand, particularly for small and medium sized homes.

Planning issues and legal procedures

The Greek real estate market continues to face problems related to the urban planning regime, the electronic identity of properties and legal settlement procedures. “The creation of a single body for real estate management, which will coordinate the action of several ministries, is necessary to address these challenges,” Potamianos suggested.

One of the worrying phenomena is the creation of a two-speed market due to the decisions of the CoE, which is expected to be clarified in the coming days. The resulting variations by municipality and construction status are affected by the recent decision of the Council of State, creating uneven competition in the real estate market.

Buyer profiles and financing methods

Greek buyers are divided into two main categories:

1. Younger people aged 40-45 years old, who rely mainly on their own income and the financial support of their parents.

2. Older people aged 55-60, who use money from inheritances or savings to buy mainly holiday homes.

A notable fact is that about 80% of transactions are carried out with cash, which differentiates the current market from the pre-crisis period, when loans were the main source of financing.

The Greek real estate market remains dynamic, with the periphery offering investment opportunities and prices in urban centres remaining high. Increasing supply through the utilisation of banks’ “frozen” properties, resolving urban planning issues, and providing incentives for renovation could balance the market. Mr Potamianos concludes: “Prices should be kept at reasonable levels so that transactions are feasible for everyone. Working with estate agents and valuers is essential as industry professionals can guide buyers and sellers to achieve fair and quick transactions.”