Sunday, June 16 2024

Greece attracts real estate investors - Holiday homes a strong lure for foreign buyers

holida house greece
According to recent data, the upward trend in residential real estate prices continued in 2023 at an accelerated pace as demand has increased for both downtown Athens areas and holiday homes, which are a strong lure for foreign buyers, given that even with the increases, real estate prices in Greece remain competitively low compared to other southern Mediterranean countries, such as Italy and Spain.

Eva Metis Koutoumanou

Indicatively, the Bank of Greece (BoG) data on Foreign Direct Investment in Greece, according to which the real estate sector absorbed more than 40% of total flows.

Specifically, inflows for real estate purchases amounted to €2.13 billion. in 2023, covering 42.5% of total foreign direct investment inflows. This is up 8% from €1.98 billion. euros, which flowed in 2022, also for real estate purchases.

According to Bank of Greece (BoG) data, apartment prices (in nominal terms) increased by 13.4% year-on-year, compared to an increase of 11.9% in 2022.

eksoxikh katoikia

A decisive role in the increase in real estate prices is played both by the demand - especially for high-end properties, by Greeks and foreigners - and by the fact that real estate prices in Greece are even significantly lower compared to similar properties in other European countries.

Based on this, a "magnet" for foreign real estate investors is once again this year, as in the previous two years, the purchase of a holiday home in Greece.

A strong "lure" for foreign buyers are holiday homes in Greece, given their competitive price as well as their goodwill.

The preferred holiday properties are high-end residences, which translates into higher sale prices, with interested parties choosing homes costing from 350,000 to 550,000 euros or more.

According to a new analysis by the holiday home sales company Elxis-At Home In Greece, this happens for a number of reasons, apart from the appeal of the Greek landscape and the beauties of the country to the foreign market. "A key reason is that selling prices, even at the high level of 550,000 euros, remain highly competitive against other southern Mediterranean countries. Properties with private pool, amenities and amenities, near or overlooking the sea, cost more than 40% more in countries such as Italy and Spain," said George  Gavrielides, CEO of Elxis.

According to the company, another reason for the shift to more expensive properties is certainly the fact that the majority of buyers buy homes "from the plans".

These purchases ensure a lower price to the buyer, up to 15%-20%, which in turn, offers the prospect of higher return, but also greater goodwill, in case someone wants to resell the property later.

In fact, some buyers sell their holiday homes, even a year after their purchase, due to the great goodwill observed.

In May this year, the Dutch owners of a villa in one of the residential complexes managed by Elxis, chose to sell their property for 325,000 euros, gaining a capital gain of 47%, compared to 2021, when this house was acquired. The only difference was that the property was sold furnished, while it had been bought without furniture.

In the area of southern Rethymno, a newly built villa of 80 sq.m. with three bedrooms, two bathrooms and a swimming pool, currently costs 327,000 euros. A property with similar characteristics in the same area, was sold last year for 280,000 euros and in 2022, 265,000 euros. The increase is 23.3% versus 2022 and 16.7% year-on-year, allowing owners to make significant profits.  in case of resale, already from the first year of their investment.

The majority of those currently investing in holiday homes are entrepreneurs aged between 50 and 65, who prioritize self-use.

Also, an important buying group concerns younger buyers, aged from 35 to 45 years, with high incomes, who look forward not only to their own use but also to the exploitation of the property for some time and later even its resale with tax-free capital gain.

According to Elxis data, the  sale prices of holiday homes in Greece are expected to increase at an average annual rate of 8% - 10% in the coming years.

This performance of investment in holiday homes certainly acts as a pole of attraction for foreign investors. "Many of our customers consider that this period is probably the last chance they will have to acquire a unique holiday home in Greece, at a very competitive price, which will allow them not only to secure a good net annual return (at least 4%) from its exploitation, but also significant profits from a future resale in a few years from now",  concludes Mr. Gavrielides.

Characteristic of the high demand for luxury properties of modern standards is the exhaustion of all properties that came up for sale in Hellinikon in the first months of the start of urban regeneration projects (skyscraper apartments, villas and residences), as stated  by the CEO of Lamda Development Odysseas Athanasiou, speaking last week to the British channel SKY News.

Sales have already yielded 700 million euros and, as Mr. Athanasiou mentioned, about 500 additional medium-scale properties have been put on the market, with pre-sales going, as he said, surprisingly well.

The properties with greater investment interest in Attica

After collecting and studying data on income properties in the Attica region, from January to March, as reported by the Protio real estate development platform, the areas with the greatest investment interest based on property performance emerge.

At the top of the list of areas with the highest income yield is Amerikis Square with 6.9%, followed by the Polytechnic area with 6.6%. For the first quarter of 2024, Korydallos and the up-and-coming neighborhood of Attica Square remain on the list with the highest returns, with a return  of 6.3%.

For the same period of time, Egaleo and Victoria Square continue to play a leading role, with returns  of 6.1% and 6% respectively, a result due to the continuous expansion of the boundaries of the center of Athens.

These indicators make the above areas excellent investment choices.

In the same position is Peristeri, one of the largest population areas of Attica, with a return  of 6%, remaining one of the most attractive investments for income properties with stable demand.

In the areas of the center of Attica, a new addition is the area of Zografou, with a return  of 5.8% due to a significant increase in rents in the area, as well as the yield of Perissos with 5.7%, an area that is expected to develop even more with the metro that will be inaugurated.

A new area of the Northern Suburbs of Attica, Ekali, was added to the list of the most attractive real estate investments with a return of 5.8% due to a noticeable increase in rental prices in the area.

The new addition highlights the potential of investment in income real estate in the northern suburbs of Attica as well.

Finally, according to the conclusions of the Cerved Property Services survey presented at the 17th Red Meeting Point by Dimitris Andritsos, CEO of CPS, average Greek incomes today do not correspond to increased house prices.

By contrast, for foreign buyers, property prices are still attractive. According to CPS Price Resilience Index, the 2021 price level is the upper limit for Greek households.

spitia attiki
Attica properties at prices by area

In the prefecture of Attica, an increase was recorded in the prices of newly built properties up to 5 years old by an average of 10.6%, in second-hand properties older than 5 years the increase amounted to an average of 13.1%. In particular, in the center of Athens, for newly built properties up to 5 years old, an increase of 4.9% was observed, forming the average sale price at 3,439 euros per sq.m.

The upward trend was the result of the increase in prices in all areas of the center, with the largest changes occurring in the area of Ampelokipi and Zografou.

At the same time, a significant increase of 9.9% was recorded in properties aged 5 years and over, with the average sale price amounting to 2,299 euros per square meter.

In the Northern Suburbs region, both newly built and second-hand properties show even greater increases compared to 2022.

Specifically, in new buildings an average increase of 7.6% is  recorded and in second-hand 11.4%. As a result, average prices stood at €4,255 and €2,828 respectively.

High prices are also recorded in the Southern Suburbs, recording very significant increases in newly built buildings by an average of 15.8%, with the largest increase per sq.m. occurring in the areas  of Vari, Glyfada and Elliniko.

In second-hand vehicles, the increase averaged 17.2% again in the areas  of Vari, Voula and Elliniko.

In the Western suburbs, the average price per sq.m. in second-hand properties increased by an average of 20.1%, with the largest increase observed in Heraklion and Nea Ionia, and the average price per sq.m. amounting to 1,561 euros. In newly built buildings, the average price per square meter increased by an average of 17.3% from 2022, with the price reaching 2,675 euros.

In Piraeus and neighboring areas, in newly built properties the average price stood at 3,303 euros per sq.m., while in older properties 2,490 euros, recording an increase of 9.8% and 9.9% respectively.

In the rest of Greece, equally significant increases were observed in both newly built and second-hand properties, as the average price per square meter for properties up to 5 years old stood at 2,561 euros and for second-hand properties at 1,635 euros, which translates into an increase of 13% and 13.5% respectively.

The house market in Cyclades

house kyklades

In the fourth quarter of 2023, the average house sale price in the Cyclades shows an increase of 15.20%, with the average purchase price standing at 3.455 euros per sq.m., from 3.000 euros in the corresponding period of 2022.

Indicatively:
Paros

Maisonette, 135 sq.m., ground floor, two bedrooms, for sale at 3.518,52 euros per sq.m.Detached house, 91 sq.m., ground floor, two bedrooms, for sale at 5.824,18 euros per sq.m.Maisonette, 80 sq.m., ground floor, one bedroom, for sale at 4.937,5 euros per sq.m.Detached house, 102 sq.m., ground floor, three bedrooms, for sale at 5.392,16 euros per sq.m.

Naxos

Detached house, 140 sq.m., ground floor, three bedrooms, sold at 2.642,86 euros per sq.m.Maisonette, 77 sq.m., ground floor, two bedrooms, for sale 4.909,09 euros per sq.m.Detached house, 96 sq.m., ground floor, three bedrooms, sold at 6.145,83 euros per sq.m.Detached house, 137 sq.m., ground floor, two bedrooms, sold at 5.218,98 euros per sq.m.

Santorini

Detached house, 400 sq.m., ground floor, six bedrooms, sold at 3.750 euros per sq.m.Apartment complex, 78 sq.m., ground floor, two bedrooms, sold at 12.179,49 euros per sq.m.Villa, 72 sq.m., ground floor, two bedrooms, sold at 6.111,11 euros per sq.m.Detached house, 219 sq.m., ground floor, six bedrooms, sold at 4.566,21 euros per sq.m.

Mykonos

Detached house, 620 sq.m., seven bedrooms, sold at 5.161,29 euros per sq.m.Detached house, 350 sq.m., seven bedrooms, sold at 11.428,57 euros per sq.m.Maisonette, 95 sq.m., two bedrooms, sold at 4.974,37 euros per sq.m.Detached house, 235 sq.m., four bedrooms, sold at 15.531,19 euros per sq.m.

In the Ionian Islands

house ionian
The housing market also recorded an upward trend in the Ionian islands, during the fourth quarter of 2023, compared to the same period last year, with Lefkada as the "champion", while Kefalonia recorded the smallest increase.

In the fourth quarter of 2023, the average house purchase price in Lefkada shows an increase of 23.30%, with the average purchase price standing at 2.652 euros per sq.m., from 2.151 euros per sq.m., which cost in the corresponding period of 2022.

In Corfu, there was an increase of 19.30% with the average selling price standing at 2.100 euros per sq.m., from 1.760 euros per sq.m. last year.

Also, in Zakynthos there is an increase of 17.60%, with the average purchase price being at 2.000 euros per sq.m., from 1.700 euros per sq.m. in 2022.

Finally, in Kefalonia, the smallest increase is recorded.  In the fourth quarter of 2023, the average house purchase price in Kefalonia increased by 4.50%, with the average purchase price standing at 2.188 euros per sq.m., from 2.093 euros per sq.m. last year.

Indicative:

Lefkada

Apartment,99 sq.m., ground floor, three bedrooms, sold at 2.878,79 euros per sq.m.Detached house, 120 sq.m., ground floor, three bedrooms, sold at 4.791,67 euros per sq.m.Maisonette, 231 sq.m., ground floor, three bedrooms, sold at 1.991,34 euros per sq.m.Studio, 35 sq.m., ground floor, one bedroom, sold at 3.857,14 euros per sq.m.

Corfu

Apartment, 72 sq.m., 1st floor, two bedrooms, for sale at 3.472,22 euros per sq.m., Detached house, 67 sq.m., ground floor, one bedroom, sold at 1.567,16 euros per sq.m.Villa, 325 sq.m., ground floor, four bedrooms, sold at 2.615,38 euros per sq.m.
Maisonette, 113 sq.m., semi-basement, three bedrooms, sold at 2.168,14 euros per sq.m.

Zante

Detached house, 200 sq.m., ground floor, four bedrooms, for sale at 2.400 euros per sq.m.Villa, 320 sq.m., 1st floor, five bedrooms, 3.750 euros per sq.m.Villa, 130 sq.m., ground floor, three bedrooms, sold at 4.615,38 euros per sq.m.Maisonette, 240 sq.m., 2nd floor, six bedrooms, sold at 4.166,67 euros per sq.m.

Kefalonia

Detached house, 119 sq.m., ground floor, five bedrooms, sold at 17.647,06 euros per sq.m.Detached house, 191 sq.m., 1st floor, four bedrooms, sold at 3.010,47 euros per sq.m.Detached house, 67 sq.m., ground floor, one bedroom, sold at 3.731,34 euros per sq.m.Villa, 254 sq.m., ground floor, five bedrooms, sold at 3.149,61 euros per sq.m.