Greece's Real Estate Market: Challenges and Opportunities for Investors

The Greek real estate market is often considered stable, but recent data shows a decline in direct foreign investment. Analysts predict these trends will intensify in 2025 due to changes in the Golden Visa program and stricter regulations for short-term rentals. Lefteris Potamianos, CEO of Potamianos Real Estate Group, outlined several factors shaping the current market dynamics and influencing buyer decisions and business strategies. Experts anticipate a further drop in foreign investments due to ongoing negative trends.

Demand Dynamics and Market Impact

Property prices in Greece remain stable, with some regions experiencing moderate growth. Potamianos attributes this to the persistent imbalance between supply and demand. He notes that most Greek buyers are middle-income earners looking for homes under 120 square meters, priced between €400,000 and €450,000. In contrast, foreign investors typically focus on luxury holiday properties, which are larger and more expensive.

Regions around Athens, such as the Saronic Gulf and Evia, are particularly attractive for holiday home investments. However, housing options in Athens itself are limited, with prices reaching €1,700–€1,800 per square meter even in traditionally affordable areas like Patissia and Kypseli. Consequently, investors are increasingly shifting their focus to peripheral areas.

Renovation as a Value Driver

The condition of properties has become a decisive factor in their market value. Renovated properties are in higher demand, as buyers prefer to avoid the expenses and challenges associated with renovations. Potamianos estimates that renovations can increase property value by 20%, but the cost of renovations has risen significantly, averaging €1,000–€1,200 per square meter. Additionally, a shortage of skilled workers and lengthy project timelines deter buyers from purchasing properties in poor condition.

Government intervention, particularly in managing bank-owned properties, could alleviate market pressure. Potamianos suggests that selling such properties would increase supply and stabilize prices. Initiatives like the "My Home II" program are also expected to boost demand, particularly for small- and medium-sized properties.

Urban Planning and Legal Challenges

Urban planning issues, delays in electronic property identification, and complex legal processes continue to challenge the Greek real estate market. Potamianos advocates for a unified property management authority to address these issues collaboratively across various ministries.

A significant concern is the emergence of a two-tier market driven by decisions from the Council of State (CoE). Potamianos predicts that variations in market conditions based on municipal regulations and construction statuses will lead to uneven competition within the real estate sector.

Buyers and Pricing Trends

Greek buyers predominantly fall into two age groups: 40–45 years, relying on income and parental support, and 55–60 years, using savings or inheritance to purchase vacation homes. A notable trend is that 80% of transactions are cash-based, contrasting with the pre-crisis era when mortgages were the primary financing method.

According to the Bank of Greece, property prices across the country increased by 7.8% in Q3 2024. New constructions saw a 9.7% rise, while secondary market prices grew by 6.6%. Economists noted that the pace of price increases has slowed compared to 2023.

Foreign Direct Investments

In the first nine months of 2024, total investment in the real estate sector reached €1.9 billion, a 17% increase compared to the same period in 2023. However, overall foreign direct investments (FDI) in Greece fell by 15% year-on-year, totaling €3.1 billion, continuing a multi-year downward trend. For context, FDI in 2022 reached €6.43 billion.

The growing reliance on real estate investments now accounts for 20–25% of total FDI, compared to usual levels in previous years.

2025 Forecasts

Experts predict a significant decline in property purchases by foreign buyers in 2025 due to changes in the Golden Visa program and short-term rental regulations. Over time, smaller investors interested in apartments are likely to be replaced by larger developers focusing on residential, tourism, logistics, and other real estate categories. Holiday homes are expected to dominate the market.

While such investments offer higher economic value than direct property purchases, they require substantial time and financial backing to materialize. The trend of declining FDI overall remains a concern.

Ioannis Revitios, honorary president of the Attica Realtors Association, identified three major issues reshaping the market:

Stricter rules for non-EU citizens applying for residency;
New measures restricting short-term rentals;
Changes in construction standards that may deter investors.
Despite challenges, Revitios considers old residential buildings in central Athens, industrial facilities, warehouse spaces, suburban land plots, and luxury villas in tourist areas among the most attractive investment opportunities in 2025.

Greece's rental yield is modest, averaging 4.73% nationwide in Q4 2024, according to the Global Property Guide. Numbeo estimates yields in the 3.72–3.75% range. These figures, combined with stringent regulations and high financial requirements, dampen Greece’s investment appeal. In comparison, markets like Georgia present more lucrative opportunities. For instance, Batumi offers average rental yields of 9% or higher, with no restrictions for foreign buyers. Transactions are tax-free, and operating costs are minimal.

While Greece’s real estate market offers stability and some niche opportunities, its investment appeal is under pressure from regulatory and economic challenges. Compared to more liberal markets like Georgia, Greece faces significant headwinds in maintaining its competitiveness in attracting foreign investment.