The Greek real estate market is currently grappling with a series of significant challenges, particularly in relation to escalating rent prices, limited housing stock, and rising property values. According to a survey conducted by the University of Macedonia on behalf of iliaspapageorgiadis.com, a staggering 95.5% of respondents perceive rental prices as high or very high, with 57.5% forecasting further increases within the next 12 months. This issue is particularly acute among younger demographics (17-34 years old), residents of Thessaloniki, and professionals within the real estate sector.
Ilias Papageorgiadis attributes this widespread concern to the severe housing supply deficit, which is expected to worsen with the introduction of the “My House, 2” initiative. This program, designed to facilitate first-time home purchases, is expected to put additional pressure on the already constrained market, where many buyers perceive property prices as being unreasonably high.
Declining Buyer Sentiment
The ongoing shortage of available properties is having ripple effects throughout the market. Notably, interest from potential buyers has decreased significantly. Compared to May 2024, the proportion of individuals actively considering a property purchase has dropped from 28% to 22%, while the percentage of sellers has decreased from 9% to 7%. Among those classified as prospective buyers, only 15% intend to purchase within the next six months, with 17.5% planning to buy within a year, 26.5% within three years, and 39.5% indicating an intention to buy in the future.
Price Range and Purpose of Purchases
The buyer profile reveals that the majority of prospective buyers are targeting properties within the €50,000 to €200,000 price range, with 29.5% specifically looking for properties priced between €100,000 and €150,000. A smaller percentage, 11.5%, is focusing on properties in the €200,000 to €300,000 range, while 4.5% are interested in properties above €300,000. Additionally, 69.5% of these buyers are looking to purchase properties for owner-occupancy, while 29% are interested in properties as investment assets for rental income or capital appreciation.
Changing Seller Dynamics
There has been a noticeable shift in seller motivations. The proportion of sellers who are offloading properties due to financial necessity has dropped significantly, from 47% in May to 31% in November. The number of sellers aiming to upgrade to another property has decreased slightly from 34.5% to 30%, while the combined percentage of those selling to reinvest in alternative assets, those who deem the current market prices reasonable, and those anticipating future price corrections, has risen from 17% in May to 36% in November.
Perception of Property Price Trends
Despite widespread skepticism about the sustainability of current price increases, a majority of respondents continue to expect further appreciation in property values. 66% of the population deems the rise in property prices to be irrational, with 24.5% specifically identifying it as a "bubble." Nevertheless, the majority still anticipates further increases, with 51% predicting higher prices in the next 12 months (compared to 56% six months ago), and 65.5% expecting price increases in their local market within the next six months.
The outlook for new homes is particularly bullish, with 75% of respondents predicting further price hikes in the new-build sector. Conversely, 55% expect price increases in the secondary market (existing homes), highlighting a growing trend toward premium pricing in both new and existing property markets.
Financing Challenges and High Borrowing Costs
Nearly 70% of prospective buyers will require financing to complete their property transactions, yet 64.5% of the population considers access to mortgage loans to be difficult or challenging. Additionally, 75% of respondents view current interest rates as high or relatively high, although this figure has improved slightly from 81.5% six months ago.
The full results of the "Real Estate Market Barometer" will be available for free download on iliaspapageorgiadis.com starting December 9. This comprehensive report will provide insights into various aspects of the real estate market, including citizens' expectations for different property categories, as well as localized insights for major markets like Athens and Thessaloniki, with data customized for buyers, sellers, and real estate professionals.
