The real estate market in our country is still moving at an upward pace, with positive prospects, in all individual sectors, residential properties, commercial properties and logistics.

This finding comes from a series of studies and researches that see the light of day. Alongside the development prospects, new trends show that they are at the center of demand in all individual sectors of the real estate sector linked to the sustainability of building construction, but also other criteria, such as the facilitation of citizens’ lives which creates new data not only regarding the buildings but also the wider area where they are located.

Apartment prices are on the rise – Which apartments are seeing the biggest rise

The increase in real estate prices continued at an accelerated rate in 2023. According to the latest data from the Bank of Greece, in 2023, apartment prices increased at an average annual rate of 13.4%, compared to an increase of 11.9% in 2022. More in detail, the price increase in the fourth quarter of 2023 compared to the corresponding quarter of 2022 was 11% for new apartments, i.e. up to 5 years old, and 12.4% for old ones, i.e. over 5 years old . For 2023, the average annual price growth rate for new apartments was 12.4%, compared to 12.5% ​​growth in 2022, while the average annual growth rate for old apartments was 14.2% in 2023, compared to 11.6% increase in 2022.

From the analysis of the data by geographic region, it follows that the increase in apartment prices in the fourth quarter of 2023 compared to the corresponding quarter of 2022 was 10.8% in Athens, 14.6% in Thessaloniki, 13.9% in the other large cities and 11.2% in the rest of the country. For the whole of 2023, the price increase in the same regions compared to 2022 was 13.7%, 16.2%, 14.5% and 10.8% respectively.

For all urban areas of the country, in the fourth quarter of 2023 apartment prices were on average increased by 12.1% compared to the fourth quarter of 2022, while for 2023 the average annual increase was 13, 9%.

The new trend – 15-minute smart cities

Almost a third of Europeans, according to research on “RE/MAX Europe 2023 Residential Market Report”, has heard about the new trend of the 15-minute city, which places all important services, including hospitals, workplaces and school facilities, within 15 minutes of residents’ homes, either on foot or by bike. Overall, 55% of Europeans, including Greeks, think there would be a big benefit if daily commutes were shorter, while nearly five in ten respondents (44.8%) believe there would be environmental benefits from creating cities of 15 minutes, as people would no longer need to travel long distances on a daily basis. Europeans are also interested in direct access to green spaces, especially after the pandemic. The shift to renewable energy is also an important sustainability trend. Almost one in five Europeans have already installed solar panels on their property and over 40% of property owners expect to install solar panels in the near future, while nearly as many want to see more use of sustainable building materials (40.2%) and environmentally friendly construction methods (36.4%).

In Greece, the first 15-minute city is being created at the former Hellinikon airport, as part of the urban regeneration that is in full swing by LAMDA Development.

As the managing director of LAMDA Development Odysseas Athanasiou has mentioned, the new green and smart city being built in Elliniko from the ground up aims for its residents to satisfy the basic daily functions (e.g. work, shopping, education, health) within 15 minutes with on foot, by bike or public transport. We have already seen this trend developing in cities such as Copenhagen, Amsterdam and Singapore.

Excellent prospects for logistics in Greece (real estate suitable for storage and transport services)

An extremely optimistic course was also recorded in 2023 in Logistics, both at the level of demand and at the level of values. As stated in the latest Value Observatory for Logistics by GEOAXIS property & valuation services, the era of e-commerce has begun bringing about seismic changes in the way we perceive the consumer experience. GEOAXIS’ forecast for 2024 for the sector is the continued increase in demand and rents (we are already at the level of 5.5 euros/sqm/month) but at a slower speed, and the increase in yields around 7%. The long-term prospects that open up for the industry are unique if Greece succeeds in emerging as a transportation hub in South Eastern Europe and a connection point between Western Europe and Asia.

More generally, the Logistics sector and the entire transit industry has huge scope for development and growth in our country. According to Deloitte research (2020), the sector contributes 10.8% to GDP each year, a percentage below the European Union average of 13%.

According to the latest data from the World Bank (Logistics Performance Index) as published in a related study by Ernst & Young (EY) in October 2023, Greece ranked 19th worldwide in 2022 from the 42nd position it held in 2018 and is now shared the same position as China, Italy and the United Kingdom. At the top of the relative ranking is Singapore, followed by Greece, Finland, Denmark, Germany, the Netherlands, Switzerland, Austria, Belgium, Canada, Hong Kong, Sweden, the United Arab Emirates, France, Japan, Spain, Taiwan, Korea and USA. Greece has improved in all areas investigated by the Logistics Performance Index (LPI). The biggest increase was recorded in the area of ​​digitization (24% improvement), followed by private sector reliability (23% improvement).

Positive prospects in Offices-Commercial as well

According to the annual Real Estate Market Research results of Cerved Property Services with the participation of more than two hundred of its partners, brokers and appraisers, the prospects of the Greek real estate market for the next six months are positive.

In particular, with regard to offices, the vast majority of respondents predict that both purchasing and leasing interest in modern offices will have stabilizing or even increasing trends in contrast to older office spaces. In fact, they believe that there will continue to be an increased demand for offices with green characteristics, high energy classification and environmental certifications.

As far as stores are concerned, the post-pandemic strengthening of e-commerce, which occupies an increasingly large share of the market at the expense of physical stores, gives a clear advantage to high-street retail, while the prospects of the secondary market do not look particularly promising. Nevertheless, rental prices seem to remain stable with increasing trends in the central commercial uses of the center of Athens and Thessaloniki.

The interest in storage spaces of all categories, according to the research of Cerved Property Services, is predicted to be particularly increased, a fact that is also proven by the barrage of investments in the field of logistics in recent years, with rental and market values ​​generally showing stabilizing trends with the exception of the markets of Athens and Thessaloniki, where they are increasing.

In the housing market, there is still a surplus of demand in Attica, Thessaloniki and all the tourist areas of the country, while in the other prefectures the relationship between supply and demand is generally balanced. The factors that strengthen the demand are the interest of foreigners in golden visas and country houses, the increased demand of well-off Greek households for owner-occupied housing and the investment role that housing has now acquired. On the contrary, the factors that weaken purchasing demand from the Greek households are inflation with the consequent rapid increase in prices as well as the increase in housing interest rates.

A particularly interesting conclusion from the CPS annual survey concerns the role played by ESG characteristics in the housing market. In particular, it appears that the sale prices of high-energy-class homes show stronger growth trends that reach up to 20%.

Sustainable investments in the real estate market

The real estate development sector in our country was also at the center of the MIPIM international real estate exhibition held in Cannes,

As characteristically mentioned by Thodoris Tzouros, Senior General Manager, Chief Corporate & Investment Banking of Piraeus Bank, who participated in a discussion held by Enterprise Greece, the Greek economy presents significant opportunities for making sustainable investments. Real estate development, green energy and tourism are at the heart of these investments. MIPIM is a leading exhibition in the field of real estate worldwide and was held with the participation of 90 countries, more than 20,000 visitors of the international real estate industry and investors managing assets of the order of 4 trillion euros.

In particular, in the tourism sector, the emphasis is on upgrading the tourist product, with strong activity in new 4 and 5 star units focusing on the Aegean islands, Crete and Athens, the latter of which has become an independent tourist product. As far as the real estate market is concerned, mobility is recorded in office and logistics buildings, mainly in Athens and secondarily in Thessaloniki. Mr. Tzouros underlined that the environment is expected to be favorable in the coming years as Greece combines a strong banking system, political stability, investment grade and the influx of important development packages from the EU that provide a significant boost to the Greek economy.