House prices up 25% in 3 years
The recovery in the residential market is gaining momentum, as shown by the Bank of Greece’s second quarter price figures.
Housing prices in Athens showed a significant increase of 6.4% compared to the second quarter of 2020, while in Thessaloniki the increase amounted to 4.1%. In the other major cities of Greece, they rose 3.2% while they rose 2.6% year-on-year in the rest of the country. Across Greece in April-June, residential property prices rose at an annual rate of 4.4%.
The central bank also revised upward price changes for the first quarter and the whole of 2020: the latest data shows that in January-March 2021, house prices showed an annual increase of 3.5% (revised from 3.2%) and last year the increase amounted to 4.4% (against 4.3% previously thought). This follows a growth of 7.2% in 2019.
In the April-June 2021 quarter, newly built apartments saw a price increase of 4.7%, while those five years and older saw an increase of 4.6%. This was after increases of 3.4% and 3.6% respectively in the second quarter of last year.
It is quite remarkable that from 2018 to 2020, housing prices in Athens registered a 20% increase and, barring unforeseen circumstances for the rest of the year, the increase between 2018 and 2021 will exceed 25% and will approach the 30 %. This development will also affect the volume of transactions, as the expected returns from foreign investors, mainly from 2022, will not equal the surge in transactions, with prices being much higher than in 2019, a record influx year. of capital for the acquisition of real estate (1.45 billion euros).
Many foreign investors have positioned themselves in the Greek market to reap capital gains as prices were much lower than in other southern European countries and rates remain below their peak in 2007. Market estimates Real estate report that asset prices are 27% to 38% undervalued from 2007. Yet, as prices rise, this gap continues to narrow, and at a rapid rate as well.