Athens has become one of Europe’s hottest housing markets, according to data from the Bloomberg City Tracker index.
Property prices in the Greek capital have risen by 12.2% over the past 12 months – triple the rise seen in Stockholm and amid declines in other European cities such as Paris.
The growth of property prices in Athens has been stimulated by Greece’s long and slow exit from the debt crisis.
Hundreds of thousands of homes in the Greek capital are still subject to lawsuits, thinning supply and driving up prices faster than in any other major European city.
The “Golden Visa” program, which allows foreign citizens to acquire property up to a certain value in order to secure permanent residence in an EU country, also contributes to the growth of prices.
The lower limit for Athens, Thessaloniki, as well as for the islands of Santorini and Mykonos, is 500 thousand euros, and for the rest of the country – 250 thousand euros.
Greece’s debt crisis has left lenders with €107bn worth of bad loans. Since then, the country’s banks have been selling the debt, many of which are secured by properties that serve as collateral against borrowers’ unpaid installments.
At some point in the future, these properties may come on the market, but until then, supply remains tight.
“There are no properties on the market,” says the president of the Athens-Attica Real Estate Association, Lefteris Potamianos, who adds that the increase in prices comes from both low supply and high interest in the “Golden Visa” program.
Apart from that, the Greek economy is expected to perform better than the others in the EU, which also increases the purchasing power of the population.
The forecast
Property prices in Greece are expected to continue to rise in the coming months and years. According to a central bank report last month, interest in buying homes from abroad is expected to remain high in the short term.
However, the rise in prices is not only in Athens. According to the latest figures from national statistics, there are also increases in holiday homes, with property prices located in the Cyclades Islands at their highest levels for at least 10 years.
The most serious increase is recorded in Mykonos and Santorini, which annually attract thousands of paying tourists.
Despite rising over the past year, average property prices in Athens remain the lowest (€2,579/sq m) of the nine markets surveyed by Bloomberg.
The big markets
In the last 12 months, there were also increases in Stockholm (+4.2%), Madrid (+3.8%), Milan (+3.7%), as well as in Zurich and Vienna, where prices increased by 2.9 percent each.
A decline as of October on an annual basis was observed in London (-1.2%), Berlin (-2.8%) and Paris (-4%). There is an increase in prices in London, Madrid, Milan and Athens.
In only two of the cities are the properties at prices of over 10,000 euros/sq.m. m. These are Zurich and Paris, while in London they cost a little over 8,500 euros/sq.m. m, which is about 1,000 euros/sq. m more expensive than Vienna.
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