Recommendations for “freezing” of objective property pricesat least for the next year, is being considered by the Ministry of National Economy and Finance on the grounds that this decision will contribute, together with other government interventions, to solving the housing problem.

The objective values ​​of real estate were adjusted three years ago and since then trade prices have increased significantly. A new increase, now, in the objective prices to the commercial levels, would have the effect of triggering a new upward rally in the market prices of real estate, exacerbating the acute housing problem. Thus, to the extent that the proposals are approved, it will be another measure, alongside the housing “package” announced by the Prime Minister from the stage of the TIF and presented in detail by the relevant ministers this week.

At the same time, the intentions of the financial staff are new suspension (expires at the end of the year) of VAT on newly built propertiessuch as real estate capital gains tax. In both cases the suspension will extend to at least 2025. The postponement of VAT – a decision taken by the government in 2019 – contributed significantly to the increase in sales and construction of new properties during this period. The postponement of the implementation of the capital gains tax had a similar positive effect.

The image of the market

High demand for housing is fueling the upward trend in property prices, according to data on market performance.

According to the data of the Bank of Greece, in the second quarter of 2024, apartment prices increased by 9.2% compared to the corresponding quarter of 2023, while in the corresponding comparison last year the increase was 13.8%. In the new apartments (up to 5 years old) the increase during the second quarter of this year amounted to 10.7% and to 8.3% for the oldest ones (over 5 years old)

The analysis of BoE data by geographic region shows that the increase in apartment prices in the second quarter of 2024 compared to the corresponding quarter of 2023 was 9.1% in Athens, 12.1% in Thessaloniki, 7.3% in the other big cities and 10.4% in the other regions of the country. For the whole of 2023, the price increase in the same regions compared to 2022 was 13.8%, 16.5%, 14.9% and 11.6% respectively. For all urban areas of the country, in the second quarter of 2024 apartment prices were on average increased by 9.0% compared to the second quarter of 2023, while for 2023 the average annual increase was 14 .2%.

Nationally, property prices are still lower (albeit marginally) than the previous record set in 2008. Since 2017, when the market recovery began, prices on average across the country have increased by 69%. In Attica the increase amounts to 88% and in Thessaloniki to 78%