Residential property market recovers despite the pandemic

The recovery of Greece’s residential real estate market continued in the first three months of 2021 despite the Covid-19 pandemic which caused an 8.2% economic slump last year, central bank data showed on Tuesday.

Greek house prices fell 42% between 2008 – when the protracted recession began – and the end of 2017. The market was hurt by property taxes imposed to plug budget deficits, tight bank lending and a jobless rate that peaked at 27.8% in 2013. But economic prospects improved thereafter with Greece emerging from its latest bailout in August 2018 and now relying on markets for funding.

Property accounts for a big chunk of household wealth in Greece, where the home ownership rate is 73.5%, above the eurozone average of 66%, according to European Union statistics on income and living conditions.

Greece’s housing sector recovery has been driven by a growing economy and foreign interest. Apartment prices rose 3.2% in the first quarter compared with the same period a year earlier, Bank of Greece data showed, and the pace was up from a 2.3% increase in the fourth quarter.

The uptrend benefited all areas of the market – including old and newly built apartments – and in all regions, although price gains in the capital Athens led the way.

Prices rose 5.4% year-on-year in Athens, where home-sharing platforms such as Airbnb and the Golden Visa program – a renewable five-year resident’s permit in return for a 250,000-euro investment in real estate – have become popular. (Reuters)