In a report, the Bank of Greece praises the positive development of the Greek real estate market and the maintenance of its high standards, despite the critical changes in the status quo of the international scene. The current health crisis, geopolitical developments, the significant increase in energy costs and the cost of construction materials, have shaped a new unfavourable reality in the market, the consequences of which, however, have not had a catalytic effect on the real estate market.
According to the BoE Report, in 2021 and the first quarter of 2022, the Greek market went through - despite the adversities - a highly positive period, which exceeded expectations. In 2021, net foreign direct investment in Greece for the real estate market amounted to EUR 1.1 million (up 34.4% year-on-year), while Golden Visa transactions for 2021 showed an increase compared to 2020 levels.
At the same time, ELSTAT recorded an upward trend in terms of residential construction activity, which exceeded the activity of 2020 (47.6%) both in terms of number and volume of new building permits (54.1%). In Attica, the growth rates were significantly higher, recording a rate of 70.5% compared to 2020, where construction activity recorded a rate of 64.1%. Consequently, a differentiation was also observed in apartment prices, as an acceleration of annual growth rates was recorded compared to the corresponding rates of 2020. Specifically, in 2021, apartment prices recorded an increase of 7.1%, compared to 4.5% recorded for 2020, while Attica once again recorded the highest annual growth rates, which "climbed" to 9.1%, with Thessaloniki following at 6.9%.
A similar positive picture has also emerged in the commercial real estate sector, both in terms of purchases and construction activity. According to ELSTAT data, high positive rates were recorded after a period of significant slowdown, with the greatest investment interest concentrated in offices and shops in Athens. Increased demand has also led to an increase in commercial space prices, registering an increased rate of 3.2% compared to 2020.
Investments by Real Estate Investment Companies Limited by Shares (REITs) also play an important role in the real estate market, exceeding €550 million in 2021. It is estimated that around 80% of the investment capital of the AIFIs has been or is intended to be directed to the Greek market. The majority of the funds are earmarked for offices, followed by investments in shops and hotels.
Finally, it is also noteworthy that for the first time, a significant geographical dispersion of investments was recorded, with 59% of investments compared to the overwhelming 70% recorded in previous years in Attica. Apart from Attica, there was a particular investment in tourist islands in Greece, mainly for the construction or development of hotels, shopping chains and commercial premises.