FREE

Greek Residential Property Market Resilient Going into 2021, but Underlying Prospects Tied to the Economy

The residential property market in Greece showed resilience in 2020, despite the adverse overall economic impact of the pandemic. Following a 9.2% cumulative increase in 2018-19, residential property price growth slowed in 2020 due to the strict travel restrictions and other COVID-19 related measures, but price performance remained positive at 4.6%. Despite the reimposition of restrictive measures in the first quarter of 2021, preliminary data from the Bank of Greece show that property prices continued to rise at a rate of 3.3% YOY. The Greek real estate market is highly dependent on foreign investment resulting in more substantial price increases in Athens and in other popular tourist destinations. By contrast, prices and transactions in other areas of Greece that have seen more limited investor interest, although likely benefiting from spillover effects, are still at low levels. Over the longer term, the evolution of the residential property market as a whole will depend on Greece's ability to create jobs and pursue policies to support real incomes growth, while maintaining a stable macroeconomic environment conducive to attracting foreign investment.

Key highlights include:
• Residential market shows resilience going into 2021, despite the economic fallout from the COVID-19 crisis.
• Higher price increases are observed mainly in Athens and in areas with tourism-related investor interest, which results in spillover effects to other geographical regions.
• The evolution of the residential market as a whole will depend on Greece's long-term growth potential.

“The long-term prospects for the market as a whole will depend on Greece's ability to recover from the COVID-19 crisis, and to sustain a stable macroeconomic and political environment. Foreign demand will likely continue to be the main driver of the residential property market, while the revival of the domestic market will be determined by Greece's ability to achieve sustainable growth that will create jobs and increase incomes,” said Spyridoula Tzima Assistant Vice President in the Global Sovereign Ratings Group.