Greek realty bucks euro trend
Reasons why house prices keep growing in this country while they are dropping in the eurozone
House sale prices in Greece posted the third largest increase in the European Union in the first quarter of this year, Eurostat data showed on Thursday.
The increase reached 10.4%, behind only Poland and Bulgaria, where prices recorded an annual increase of 18% and 16% respectively.
Overall in Europe the picture is relatively stable, as in the EU a small increase of 1.3% was recorded, while in the eurozone prices fell by 0.4%. Based on Eurostat data, house sale prices fell in seven countries, while increases were recorded in 19. The biggest decreases are observed in Luxembourg with 10.9%, Germany with 5.7% and France with 4.8%.
In a recent analysis, Alpha Bank reported that the housing sales price index in Greece, as published by the Bank of Greece, has seen a total increase of 66% since the third quarter of 2017, which was the lowest point in the market until this year’s first quarter. Only in 2023 did average nationwide growth reach 13.8%, before falling slightly to 10.4% in the first three months of the year.
The contrast with the eurozone price decline is explained by the fact that the Greek market is at a completely different point in the price cycle, as, while in the rest of Europe prices were rising, in Greece they were falling – and vice versa. In fact, even today real estate prices in this country have not fully recovered from the levels recorded before the financial crisis.
House prices remain 4% below the highest point recorded in the third quarter of 2008. The only exception is the region of Attica: After the 9.4% year-on-year increase recorded in the first quarter of this year, house prices have recorded a total increase of 85% compared to the beginning of 2017, when the recovery of the real estate market began. Therefore, they are now 2.4% higher than in 2008, when the previous all-time high of the housing market was recorded.
Other reasons for that phenomenon are the outperformance of the Greek economy, the great rise of tourism and the growth in short-term rentals.
