Property remains attractive

Foreign institutional investors are waiting to see the course of the Greek property market, but have not lost all interest. As market professionals told last week’s 7th Delphi Economic Forum, developments on the geopolitical field will clearly affect local realty, although it remains unknown what the impact will be.

According to Bain Capital Credit head Giorgos Elekidis, the rise of the Greek property market was not hampered by the pandemic: “The question now is how this geopolitical crisis will affect real estate, which at the moment is the biggest challenge,” said Elekidis.

For his part Giorgos Kormas, chief executive at Piraeus Real Estate, noted that “inflation leads to an increase in construction costs, but property is also a refuge for investors, even in wartime.” He does add that consumer demand will subside, as people’s disposable incomes contract. The crisis in Ukraine is leading to some reduction in prices and in some cases preventing the creation of a bubble.

Giorgos Mantzavinatos, CEO at Q Real Estate Services, added that “we are facing the wait-and-see stance of investors due to the war, but the buying interest remains alive. I think once a truce is agreed things will change.” He believes that at least the properties his company has obtained continue to offer significant returns to foreign investors, and estimates that in the next few years supply will grow significantly in the local market.

Banks will have to play a key role in the future of the property market. In 2021 the new loans issued amounted to 900 million euros, compared to €3 billion in 2008 when the market peaked. However, as of 2018 the market has steadily seen growth, both in mortgage issues and in property rates.

Alpha Bank’s Estate Management & Investments Director Giannis Ganos argued that “we definitely are in a growth course that has not been affected by Covid, nor do we believe it will be affected by the energy crisis.” He pointed out that banks are now healthy enough to issue fresh loans.