Realty accounts for 54% of FDI
The real estate market and capital inflows from abroad for the acquisition of mainly houses have this year provided a lifeline to the foreign direct investments made in Greece.
According to Bank of Greece (BoG) data, out of a total of 2.1 billion euros of foreign direct investments made in the Greek economy in the first half of this year, 54.2%, or €1.14 billion, concerns the acquisition of real estate.
This is a new high, continuing this trend that started in early 2023 and seems to be continuing with increasing intensity. During this year’s first quarter, the share of the real estate market in foreign investment was 43.3%, as €520 million had flowed in, while total flows from abroad had reached €1.2 billion.
However, the picture in the second quarter was different, as foreign capital for the purchase of real estate amounted to €622 million, while total foreign investment in the economy did not exceed €900 million.
Throughout 2023 the contribution of the real estate market as a percentage of all foreign investments had reached 47%, since, out of a total of €4.48 billion that flowed into the Greek economy, €2.1 billion concerned to the real estate market. This is due to the downward trend of foreign investments, as in 2023 they decreased by 38.7%, from €7.5 billion in 2022 to €4.6 billion last year.
Real estate market executives point out, however, that the recent measures taken by the government both to ban the creation of new short-term rental accommodation in the center of Athens and to reduce property purchases through the Golden Visa program will have a direct impact on the reduction of buying interest from abroad, which will now have a great effect (greater than in previous years) on foreign direct investments, as long as this downward trend of the relative index continues. On the other hand, it is possible that the easing of ECB monetary policy, the reduction of inflation and the improvement of macroeconomic conditions abroad will restore demand from foreigners for investments in the Greek economy.
