The great increase in foreign investments in the Greek housing market continued during the first quarter of this year. According to the data contained in the report on monetary policy, published yesterday by the Bank of Greece, during the first three months of 2023 almost 500 million euros (497) flowed into the country, an amount that is increased by 33% compared to the corresponding quarter last year. At that time, 374 million euros had been invested.

In total, in 2022 foreign investments in the real estate market reached 2 billion euros, an increase of 68%, which at the same time was also a historical high.

However, as it seems, it is very likely that even this amount will be exceeded, as there has been an increase in investments by citizens of third countries who wish to meet the deadline given for the acquisition of real estate, with a minimum investment limit of 250,000 euros.

It is reminded that from August 1 this limit will be doubled to 500,000 euros in the center of Athens, in the northern and southern suburbs, in Mykonos, in Santorini and in the Municipality of Thessaloniki. This increase and the time window that was given triggered a “wave” of purchases in the above areas, which will also be reflected in the data of the second quarter of the year.

Already, based on the picture obtained from the Department of Immigration, only during the first four months (January – April) 3,064 requests have been submitted for the granting of permanent investor residence permits.

This is a number that is increased by 155% compared to the corresponding first quarter of last year, when 1,200 requests were submitted. Based on the applications of the first four months, it appears that purchases and sales of at least 766 million euros have been implemented, when in total in 2022 the corresponding size (based on the applications submitted) had risen to 1.09 billion euros.

As reported by TTE, during the first months of 2023 the Greek real estate market continues to record high rates of price growth (14.5% in the first quarter nationwide and 11.7% overall in 2022), as a result of strong demand and the limited supply of modern real estate. In fact, according to the relevant analysis, “the low supply of modern properties gradually leads to the diffusion of price increases to properties of lower technical specifications”.

On the other hand, however, it seems that the increase in interest rates has started to create “dams” in price increases. Specifically, the total amount of new mortgages decreased by 7.2% on an annual basis during this year’s first four months (January – April), compared to an increase of 67.3% in the corresponding period last year. At the same time, there is a decrease in mortgage demand for four consecutive quarters, after two years of continuous growth.

TTE concludes its analysis, stressing that “the real estate market will continue to be under pressure from increased inflation and interest rates, tight funding, high energy and material costs and broader geopolitical uncertainty.

These conditions, combined with the downward correction of values ​​that is already taking place internationally, are estimated to direct investment interest towards sustainable investments and towards properties with lower operating costs, greater flexibility and quality levels that will ensure the generation of income and capital gains for a long time time horizon. The Greek real estate market, presenting important peculiarities in relation to the rest of the real estate markets in Europe, is estimated to continue to maintain its attractiveness, especially for its high-quality stock.