Why there was no global collapse in prices on the real estate market of Greece

July 25, 2016

Why there was no global collapse in prices on the real estate market of Greece

For quite a long period of time catchers for cheap European property with bated breath has watched over the situation in Greece. Everyone was waiting for the sharp fall in prices per square meter, representing how the luxury mansions on the coast will be sold off for a pittance.

Why it did not happen, and what happens next will tell the experts of the company Grekodom – Daria Chashchina and George Sipilidis.

There is no reason for the prices collapse

In the period from 2009 to 2014, we have seen the sharp drop in property prices in Greece. Some prices decreased by almost 50%. After 2014, prices drop markedly decreased, and in 2016 it was finished.

New construction by developers has decreased significantly, and a large part of the construction is carried out either under the order or for a specific target audience i.e. guarantees to developers 100% sales. Accordingly, the prices also stay stable, and there is no reason for the sharp collapse. Moreover, according to our analysts, in the foreseeable future, property prices in Greece will though grow - slowly but steadily. This is especially true for resort real estate and hotel business projects because the tourist market in Greece is now developing very quickly.


In our opinion, the geography of sales in the future also will remain unchanged, since most people are interested in "proven" areas, namely:

- for business and residence – Athens and Thessaloniki

- for hotel business and resort real estate – Chalkidiki,

- the area of Pieria (Olympic Riviera), Corfu and Crete.


Current prices

Prices on the secondary market in the largest cities of Greece – Athens and Thessaloniki, start from €400 per sq m, and on the primary market - from €900 per sq. m.


In resort areas and in on the islands the demand is much higher and therefore the price is also different. Resale properties start from €600 per sq m, primary – from €1200 per sq. m.


Land has a constant demand, but mostly in resort areas, near the sea. The land prices didn’t fell so much – an average of 30%. For example, on the first sea line plot with possibility of construction can be bought for €500 000.

The cost of construction has almost not changed, but the building materials have risen in price. Housing "under the key" cost from €1,000 per sqm.

Changes in the tax system

The main change in the tax system is an increase of VAT rate from 23% to 24%. First of all it concerns those buyers who purchase properties from developers who obtained the permit for construction after 2006. Tax of 24% will be paid in a lump sum at the moment ofregistration of the transaction.

What is for sale in Greece at the moment?

About 50% of all of our customers are interested in buying property in resort areas for vacation and 25% of all queries search for profitable investment proposals in major cities. The remaining 25% are people who are looking for properties in major cities with the purpose of visiting their children who study in Greek universities. In Greece higher education in state universities for nationals of third countries is free.


Recently, the growth in demand from the Ukrainians and the Russians slightly declined, but at the same time there is a growing interest among the citizens of Europe, especially Serbia and Bulgaria.


Russians are most interested in property worth up to €250,000 as the purchase of such objects allows to obtain a residence permit in Greece for 5 years for the whole family of the buyer, with the right to further extensions.

Europeans often acquire properties in the average price category – from €50 000 to €150 000. Buyers from Asian countries often consider buying business projects valued from €500 000.

Investing in commercial properties

It is very profitable to buy retail space, which is leased. This business survived during the financial crisis, and hence continues to be stable, function well and make a profit. Income from investments in such facilities is 5-10% per annum, taking into account all expenses.


When you purchase a business projects it is important to pay attention to the location. If it is commercial premises, they should be located in large cities close to the streets with good accessibility. If we are talking about hotel, it should be a popular resort area.


Of course, one of the most profitable types of business in a country like Greece are hotels. Now we regularly receive requests from foreigners for the purchase of large hotels and small apart-hotels. The income from that property can be higher than 10% per annum.

Mortgages for non-residents

Foreign buyers can get a mortgage at a local bank on very favorable terms. For example, a legal company of our holding MBGCS with one of the Greek banks has created a special package for those who want to buy property in Greece with a mortgage:

Loan rate: 4.5% -5.5% of annual

Loan amount: up to 60%

Loan term: up to 15 years, the borrower on the date of termination of loan should not be more than 65 years.


Citizens of countries outside the EU can obtain credit if they have:

- annual income over €30 000

- opportunity to pay from their own money.


The procedure of buying, taxes

Today the procedure of the transaction is simplified and requires minimal documentation. It takes from 14 to 30 days.


Property owners pay 2 taxes.


The tax rate on real estate transfer is currently established in the amount of 3.09% (instead of 10% as it was before 01.01.2014) for objects from the developer who received the construction permit issued before 01.01.2006, and 24% if the permit was issued after the specified date. If properties are purchased from a private individual, the tax, regardless of the date of construction of building will amount to 3.09%. This tax is paid 1 time during the transaction.

Also, property owners pay an annual tax on the possession. It depends on the location and area of the object, but the average is €3-€6 per sq m per year, on luxury objects, - to €15.

Text – Alena Eliseeva, ee24

Photocredit Depositphotos.com