Greek realty bucks euro trend
Reasons why house prices keep growing in this country while they are dropping in the eurozone
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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.