The housing market in Greece showed resilience in 2020, despite the overall negative economic impact of the pandemic.
As DBRS comments in its analysis, after the cumulative increase of 9.2% in the period 2018-2019, the increase in house prices slowed down in 2020 due to travel restrictions and other measures for the coronavirus, but the price performance remained positive, at 4.6%.
Despite the re-imposition of restrictive measures in the first quarter of 2021, preliminary data from the Bank of Greece show that house prices continued to rise at a rate of 3.3% per year.
The Greek real estate market is highly dependent on foreign investment, resulting in larger price increases in Athens and other popular tourist destinations.
On the contrary, prices and transactions in other areas of Greece with more limited investment interest, although they probably benefited from the effects, are still low.
In the long run, DBRS estimates, the evolution of the real estate market as a whole will depend on Greece’s ability to create jobs and promote policies to support real income growth, while maintaining a stable macroeconomic environment to attract foreign investment.
As Spyridoula Tzouma, assistant vice president at Global Sovereign Ratings Group, comments, “the long-term prospects for the market as a whole will depend on Greece’s ability to recover from the coronavirus crisis, and to maintain a stable macroeconomic and political environment.”
“Foreign demand will probably continue to be the main lever of the real estate market, while the revitalization of the domestic market will be determined by Greece’s ability to achieve sustainable growth that will create jobs and increase incomes.”