Greece has the fifth fastest growing property market in the European Union, according to July-September 2019 data published yesterday by Eurostat, as only four EU member-states beat the country’s 9.1 percent annual price rise recorded by the Bank of Greece.
This is a diametrically opposite picture to that of previous years, when Greece was one of the very few countries where property rates were in decline.
Greek price growth accelerated over the course of 2019: Based on the revised data from the BoG, property rates expanded 5.3 percent year-on-year in the first quarter of the year, with the annual rise climbing to 7.7 percent in Q2. Property prices across Greece posted yearly growth of 7.4 percent over the January-September period, though in Athens the rise amounted to 10.3 percent. In 2018 the nationwide average growth rate only came to 1.8 percent.
Property market professionals say that a key factor for this growth – which started in early 2018 but soared last year – has been the inflow of funds from abroad for the acquisition of properties, mainly for utilization in the short-term rental sector.
In 2018 inflows jumped 172.1 percent to 1.12 billion euros from 414.7 million in the previous year. This trend continued in the first half of 2019, which the latest data concern, with 94.6 percent yearly growth to 736.6 million euros from 378.5 million a year earlier. This is thanks to the continued improvement of the tourism sector’s figures, the improving economic sentiment in Greece and investor expectations of a further increase in their returns from the highly popular short-term rental sector, according to an analysis by Alpha Bank. It also points to the significance of the program for the concession of five-year residence permits (known as Golden Visas) to non-EU citizens who invest at least 250,000 euros in Greek properties.
Alpha’s analysts stress the significance of rising property prices, which translate into an increase in the value of loan collateral, thereby improving the banks’ net position while increasing the wealth of households.