Greece said goodbye to an almost ten-year crisis when property prices rose again, albeit slightly, towards the end of 2017. This was followed by a two-year phase in which Greek real estate was again sought after by investors. In addition to nationals and Europeans, private and institutional investors, including from China and Israel, were among the investors. According to analyzes, prices rose by an average of 11.5% from the third quarter of 2017 to the third quarter of 2019. Old, partly empty buildings in the big cities have been developed to new, profitable real estate properties with popular uses and solvent tenants. Tourist properties were accommodated in many properties.
But Corona is now slowing down market activity – and certainly not only in Greece. However, the timing is far from bad for investments. But let’s take a look at how the Greek market will develop.
Despite everything … minor price corrections
The consequences of the corona crisis will also for the Greek economy be very extensive. From May 4th, however, restrictions will be relaxed, and economic activity should slowly return to normal mode. The final extent of the economic consequences of the corona crisis will not be known until autumn, when the tourism season has ended.
However, the price impact of the corona virus on Greece’s real estate will most likely be manageable and only temporary. After the Greek real estate market will adapt to the new conditions, a longer period can be expected from the coming spring, in which prices will rise again. Due to the years of crisis, there is still a shortage of spaces in some sectors and great price increase potential. The corona-related price volatility will also be rather low, as prices have not yet increased excessively compared to the low of 2017. Given the current circumstances, it cannot be assumed that prices will fall below the 2017 level.
The coming March – the beginning of a new era
An intense downturn in Greece’s gross domestic product is expected for 2020. The Greek Ministry of Finance currently (as of April 30, 2020) predicts a 4.7% decline in national economic output. For 2021, however, an upswing is expected with growth of the order of 5.1%. The next spring will be the start of a promising period with all the usual positive feedback. Compared to the real estate markets of other countries, which will experience a stronger correction, the Greek real estate market offers several advantages. On the one hand, the market is still at the start of a growth epoch due to the years of crisis – currently only interrupted by a one-year corona-related break – while prices are still at a good level. The outlook is positive and the expected price increase on a five-year horizon is very promising. In this context, the Greek government’s good handling of the corona crisis, the political stability and the potential of the Greek location not only for the tourism sector should not be neglected.
If one wants to benefit optimally even in times of crisis, there is no way around it, even squinting at the Greek market, even if Greece has never been targeted before. Corona changes a lot of things. So, also the recommended diaspora of investments should be adjusted. And in Greece is truly the ideal time for investors! The motto is: Follow the market and get in no later than the end of February 2021. Investors who act counter-cyclically and will enter the market now could also benefit from the low construction prices, which will certainly fall until March, albeit only temporarily. Therefore: the faster, the better!
Mavvidis + Partner is a planning and consulting company based in Greece and specializing in the planning of buildings and advice on real estate investments.
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