Property values in major cities continue to rise at a robust pace, Corina Saias, Managing Director of Premier Realty Greece, stated.
More specifically:
Residential Real Estate
In Athens, house prices increased by 10.3% in Q1 2024 compared to the same quarter in 2023, though this growth is slower than the 17.39% surge seen the previous year. In Q2 2024, prices rose by 12.4% compared to 2023. Piraeus recorded the highest increase this quarter, with a 28.9% rise from the previous year. From March 2023 to February 2024, private construction activity across the country increased by 13% in the number of buildings compared to the previous year. Meanwhile, the prices of building materials continue to rise.
Despite the rising costs, demand from international buyers remains strong. Foreign investors are particularly drawn to luxury and higher-cost residences, betting on future capital gains. In 2023, foreign real estate purchases reached € 3 billion. The real estate sector contributes about 20% to 35% of the country’s total foreign direct investment (FDI) each year. While prices are expected to increase in the short term, rising inflation, escalating construction costs, and high interest rates are likely to negatively impact investment profit margins in the long term.
Greece is outperforming other European countries in terms of residential rental yields. According to a March 2024 report by Global Property Guide, average gross rental yields in Greece dropped to 4.82% in Q1 2024, down from 5.22% in Q3 2023. However, yields vary by location; for example, a one-bedroom apartment in Patision offers a 7.5% yield, while in Platia Amerikis, it’s 6.9%. Generally, smaller apartments generate higher rental returns compared to larger units.
Office Market
Corina Saias notes that over 60% of global real estate investors have integrated ESG criteria into their investment strategies. In Greece, the shortage of “green” buildings, a result of the decade-long crisis and the COVID-19 pandemic, presents significant growth potential, likely extending for at least another decade. By 2026, 380,000 sq.m of new green office space is expected to be added to the Greek market. The return on investment for modern, green office buildings averages around 6% for Grade A properties, 7% for Grade B properties in prime locations, and 8% for Grade B properties in secondary locations. Green buildings can command rental prices above € 30 per square meter, with these prices being 30% to 40% higher than conventional office properties. Since 2019, office prices per square meter have increased by 47.3% in Athens Center, 40.6% in the Eastern Suburbs, 49.9% in the Southern Suburbs, and 33.3% in Western Athens.
Student Housing
Corina Saias emphasizes that many investors are focusing on student housing, which offers a return of around 7%. Across Europe, student housing has become a leading trend in real estate. State university dormitories accommodate roughly 5% of the student population, prompting investors to purchase unfinished buildings or renovate older properties near universities and metro stations. The goal is to create furnished studios with private bathrooms and shared amenities, such as laundry rooms, gaming areas, and lounge spaces. High-demand areas in Athens include Zografou, Goudi, Neos Kosmos, Kallithea, Petralona, Neapoli, and Ilissia.
Logistics Market
Investment interest from both Greek and foreign companies is also focused on logistics and industrial properties, with expected yields around 7%. Mrs. Corina Saias states that Greece plays a pivotal role in connecting Europe with Asia, driving demand for contemporary, energy-efficient logistics facilities, particularly in areas like Oinofita, Magoula, Aspropyrgos, and Elefsina. Over 250,000 square meters of new logistics facilities are expected to be completed by 2024.
Hotel Investment
In 2023, hotel investments in Greece reached € 3 billion, reflecting a 23% increase from the previous year. This trend has continued over the past five years, with hotel investments experiencing an annual growth rate of 10-15%. A report by Travelworks Public Relations indicates that 40% of new hotels set to open will be operated by international brands, while the remaining 60% will be led by domestic companies. For the first time, Athens has entered the list of the top 10 metropolitan destinations for hotel investment in Europe, ranking ninth (2024 Hotel Investors Survey).
As Corina Saias from Premier Realty Greece indicates, the Greek real estate market presents numerous promising investment opportunities.
SOURCE; ANA-MPA
