The lack of supply of real estate amid high demand from interested parties in Greece and abroad has led and will continue to drive up real estate prices, with the so-called “good” properties in particular making the big difference and moving significantly higher, with larger increases. The outlook for the real estate market in 2025 remains positive, however the upward trend in prices is expected to be maintained at a slower pace, as has also been seen from the slowdown in the rise in prices per quarter throughout the previous period.

The main parameters related to the negative supply-demand balance and placing restrictions on the smooth supply of new properties to the market have to do with the conditions of geopolitical uncertainty of recent years and the increased cost of energy and materials, in combination with recent developments that concern and directly affect the construction sector (see decision 146/2025 of the Plenary Session of the Council of State on the unconstitutionality of the incentive system of the New Building Regulations – N.O.K.). Given these supply restrictions, “prices, especially of residential properties, are expected to continue their positive course in the coming period, provided that current demand from abroad and domestically is maintained,” the Bank of Greece report states in its relevant commentary on the domestic real estate market. It should be noted that in 2024, net receipts for the purchase of real estate from abroad continue to be at a high level as a percentage of total investments in the country and amounted to 2.75 billion euros, compared to 2.133 billion euros in 2023.

Rise also in Europe

The BoG’s assessment comes at a time when real estate prices, after the fall in 2023, are (again) on the rise in Europe, with the inventory deficit also being a key parameter in this case, magnifying the problem of rising rents. As shown based on the latest Eurostat data, in the fourth quarter of 2024, house prices, as recorded by the House Price Index, increased by 4.2% in the euro area and by 4.9% at the EU level. compared to the same quarter of the previous year. In the third quarter of 2024, house prices increased by 2.7% and 3.9% in the euro area and the EU, respectively. The EU statistical agency does not include data for Greece in its relevant indicators, which, however, based on figures from the Bank of Greece, is moving higher compared to many other European markets. According to the estimates collected by the country’s credit institutions, in 2024 the housing market at the national level is expected to record an increase in prices, with apartment prices increasing by 8.7% year-on-year, compared to a significant increase of 13.9% in 2023 and 11.9% in 2022.

As for other European markets, it is noted here that among the Member States for which data are available, two countries showed an annual decrease in house prices in the fourth quarter of 2024 and 24 showed an annual increase. The falls were recorded in France and Finland (both -1.9%), while the highest increases were recorded in Bulgaria (+18.3%), Hungary (+13%) and Portugal (+11.6%).

Expectations

More specifically for Greece, expectations for the real estate market for the first half of 2025 remain positive, although slightly more moderate compared to the previous half. The existing uncertainties are related to geopolitical instability, political and economic developments at a global level, high construction costs despite the relative decline in inflation, as well as recent developments and the expectation of further changes in the legislation governing the construction and development of new real estate.

In particular, for the housing market, and in particular high-end investment housing, but also special-use and serviced housing, expectations remain particularly positive. However, the increase in housing prices, at high rates, in recent years has had a negative impact on the affordability of housing for middle- and lower-income households. The activation of the “My Home II” Program, while ensuring access to housing for vulnerable households, further strengthens the demand for older properties that fall within the Program’s specifications. Legislative initiatives towards limiting investment demand in specific locations, through the most recent stricter frameworks for short-term rentals and the Golden Visa, aim to free up housing stock for primary residence use. However, long-standing issues of bureaucracy in transfers and frequent changes in the legislative and tax framework continue to affect the attractiveness of new development projects, ultimately limiting the influx of modern properties into the market.

The Bank of Greece believes that resolving the housing problem requires further interventions towards simplifying and accelerating the procedures related to the purchase and sale and development of real estate, as well as solutions which, through a national strategic plan, will aim at the economic and business strengthening of the region, at decongesting metropolitan centers and at ensuring a better dispersion of demand for housing throughout the country.
Market trend

During 2024, the domestic real estate market remained particularly active, attracting interest and capital from Greece and abroad, as the Bank of Greece points out. Real estate prices moved upwards, with the high-end segment of the market recording significant growth rates. Investment interest was directed across the spectrum of property uses, with demand continuing to exceed supply of modern-standard stock. The housing market across the country continues to record strong annual growth rates in nominal apartment prices, which have slowed over the last seven quarters. Indicatively, in the individual quarters of 2024 the annual growth rates of prices were 10.8%, 9.6%, 8.1% and 6.6% respectively.

Investment interest from abroad remains strong and is confirmed by both the Golden Visa program data and the foreign direct investment data for real estate purchases, with net receipts in 2024 increasing by 28.9% on an annual basis. Within the framework of the Golden Visa program, during 2024 the issued and pending residence permits of the Ministry of Immigration and Asylum for legal immigration (February 2025) amounted to 9,381 requests compared to 8,426 in 2023, recording an annual increase of 11.3%.

In the eleventh month of 2024, the construction activity for residences throughout the country (ELSTAT data) recorded a significant increase in both the number and the buildable volume of new residential building permits, with annual growth rates of 30.3% and 22.7% respectively, however it remains low compared to pre-crisis levels. Also, positive business expectations for residential construction (IOBE data) recorded a moderate increase in 2024 on an annual basis by 7.7%, compared to an increase of 18.1% in 2023. Residential investments (ELSTAT data at constant prices) increased by 2.7% in 2024, compared to an increase of 24.7% in 2023, however they remain at a low level as a percentage of GDP (2.4%). The total cost of construction of new residential buildings (ELSTAT data) continues to increase in 2024, although at a slowing annual rate (3.7%, compared to 6.2% in 2023).

Based on data collected by the Bank of Greece on bank financing, the total amount of new mortgage loans increased by 20.4% in 2024, but continues to remain lower than pre-crisis levels, while the balance of mortgage loans decreased by 2.6%.

Finally, according to data from the Bank Lending Survey (4th quarter of 2024), there has been a decline in demand for mortgage loans for almost three years (with the exception of the second quarter of 2023) due, among other things, to the level of mortgage interest rates.