Greek real estate after Corona

First estimation on the impact of the coronavirus to the greek real estate market 

(greek real estate market 2021)


The Greek government has coped very well with the coronavirus pandemic. Relative to other countries, contamination and death rates have been kept at a very low level, and the easing of protective measures will begin in the next few days. But what effects does Corona have on the Greek real estate market? Are there opportunities for investors?

At the current time, it is very early to quantify the consequences of the corona crisis on the Greek real estate market. Based on the knowledge of the market, one can estimate the likely tendencies that will certainly also apply to the property markets of other countries. The exact extent of the consequences will certainly only become apparent in a few months’ time and will be mitigated by the government compensation measures that follow.

Housing market – different pictures

For the housing market, one has to make for Greece a strong distinction between new buildings and old buildings. In the case of new buildings, due to the lack of existing offers, it can be assumed that the prices will not be significantly affected. Due to the long-standing crisis in Greece, the new building activity was almost stopped and therefore relatively few new residential buildings were built. Projects under construction will thus be completed, but new projects, on the other hand, will possibly be temporarily slowed down. New buildings were increasingly preferred by foreign investors. With older buildings, which are primarily aimed at local investors (owner-occupiers), depending on the development in the coming months, a greater degree of influence will be more visible. If unemployment rises immensely and there are many loan defaults, it can be assumed that the prices of old residential properties will fall. However, even in this second case, one can assume that the price correction will remain manageable, especially since property prices in Greece – due to the long crisis – were at a very low level in 2017 (year of the first price increase after 2009) from which they have not recovered excessively in the past two years. As things stand today, it is not to be expected that prices will fall below the 2017 level, unless individual owners will have liquidity problems. Some apartments that have been dedicated to AIRBNB use in the past two years are being returned to the traditional tenant market. Accordingly, rents in the relevant regions could fall slightly.

Tourism real estate

Even with tourism properties, such as hotels, it is not yet possible to make a realistic assessment, especially since the actual consequences of the corona crisis are not yet apparent in this market segment. It is a fact that the hotels remain closed for the months of March, April and May and thus the turnover of this period ceases altogether, but one hopes for a relatively acceptable residual season for the period from June, after which the hotel companies may possibly still achieve their break-even and secure their existence. If this attempt is largely successful and the hotels for sale remain in short supply, the prices will remain relatively stable. On the other hand, one can assume that the hotel companies that will encounter problems will have to sell on more favorable terms and could therefore be extremely interesting for investors.

The holiday home market, however, will not be adversely affected. If one takes into account the good results in the health sector, according to which Greece is considered a safe country, then one can assume that many prospective customers would even rather buy or build their holiday home in Greece than in the other competitive locations. Depending on the normalization of air traffic, this market therefore remains stable with an even increasing trend.

Commercial real estate

The picture differs immensely for commercial properties. While stores with tenants for primary supply goods sometimes even benefit from the crisis situation, for example, catering businesses, clothing stores and electronics stores, which had to shut down the business, are very badly affected in their sales. Many of them will not be able to start operations again or only under other conditions. Accordingly, there will be some vacancies with the known consequences or rent reductions with resulting impairments. In addition, it can be assumed that the orientation of consumers towards online trade will influence retail properties.

Office market

There is a huge shortage of modern office space in Greece. Large-format complexes with an area of ​​over 5,000 m² per user are even a rarity and according to analyzes before the corona crisis were in great demand. It will become clear in the next few months whether this demand will remain constant or whether it has fallen victim to teleworking in the meantime, because it can be assumed that teleworking will establish itself in some sectors. Teleworking and bankruptcies could further reduce the need for office spaces – especially in the larger cities of Athens and Thessaloniki. Given the new circumstances, it could also be assumed that the demand will concentrate on smaller areas. However, the exact extent can only be seen in the course of the next few months.

Logistics market – a real opportunity?

The market for logistics real estate is a promising market for the near future. Even before the Corona crisis, there was a huge shortage of space of this kind. Due to the immense increase in online purchases, the need has now increased even further. For Greece, it is assumed that online trade has almost tripled in recent weeks. In the weeks following the relaxation of the quarantine, it can certainly be seen whether this phenomenon will continue or whether consumers will go back to the retailer in large part. In any case, this is still a promising market, and the additional 200,000 m² of new space planned for 2020 and 2021 should still not meet the demand sufficiently. Further, the port of Thessaloniki was also privatized a few years ago and is developing very well. Accordingly, the area around Thessaloniki with a corresponding shortage now offers immense potential for investments in logistics real estate.

In summary, it can be said that according to initial analyzes, the Corona crisis will have a temporary negative impact on real estate in Greece. However, there are many factors suggesting that any price correction will only be temporary and that the price increase will start again from mid 2021. Incidentally, as for most economies, a strong economic downturn is also expected for Greece in 2020, but on the other hand, an extremely strong upswing is predicted for 2021. As already mentioned, prices had dropped immensely during the long Greece crisis and it is expected that prices will not fall below the 2017 level. We also assume, that not many owners will have to sell below value. An increase in value on a five-year horizon can be expected, and this continues to make Greek real estate very lucrative, especially if you have to expect extensive corrections in the real estate markets of other ‘more expensive’ countries. The post-Corona period will also offer many opportunities for project developments in Greece. Distressed assets, which will surely also arise in Greece, are particularly well suited for this. In addition, we estimate that the construction costs will also ‘optimize’ temporarily for the next twelve months. This is a good opportunity. So, if you develop the right projects, you can even benefit from Corona within the next few months. Accordingly, countercyclical action also applies here!


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