Galloping Greek property prices set to slow in 2022
Property prices in Greece are expected to continue rising in 2022, but at a slower pace than last year due to an expected decline in the country’s economic performance, experts say.
Last year, Greece’s economy rebounded by a forecast of 7-8%, pushing up residential property prices by 6% in the first nine months of the year, according to official data from the Bank from Greece. Office prices jumped 3.2% in first half in Athens, against gains of 0.7% during the previous semester, in a context of low levels of supply.
In 2022, however, the Greek economy is expected to grow by 5%, which could lead to house prices rising at a slower pace, between 3 and 4%.
“Real estate prices often keep pace with economic growth, but follow the expansion of GDP by around 1-2%,” a market official told Greekguru.net.
“This means that we could see price increases of around 3%, or a little more, for 2022, although there are a series of other factors that also need to be taken into account, such as the strong momentum. of the market at the moment, the ongoing infrastructure projects and Greece expand road and public transport networks“, added the source.
Market watchers point out that house prices are still around 30% below peaks reached in 2008, when the Greek economy entered a ten-year slump, indicating that they now have considerable room to increase.
Government initiatives are also stimulating the domestic market. In December, officials said Greece would extend the VAT freeze on newly built properties until 2025.
On the other hand, galloping prices, in some cases about 25 percent, exclude many Greeks from the market, as income levels barely budged over the same period, while high energy and construction costs also limit demand.
Another area of concern to experts is the highly segmented demand for housing.
Buying interest is largely driven by foreign buyers, with many deals being done in specific areas, such as the islands and central Athens, on better quality assets.
This must extend to all segments of the sector to help support more balanced and sustainable growth, officials add.