Why the market in Greece is booming – and where bargains can still be found

Interested parties should hurry up. “The demand exceeds all expectations,” reports Lamda CEO Odysseas Athanasiou. He expects the apartments in the Marina Tower to be sold out by the beginning of next year at the latest.

Greece is one of the most popular travel destinations for German holidaymakers this summer. But not only package travelers get off the planes. More and more people interested in real estate are also looking around Hellas. “The demand for holiday properties in Greece is higher than ever before,” says Christian Seyrer, Managing Director of Global Real Estate Service (GIS). Because of its attractive price-performance ratio, Hellas is “perhaps the most attractive real estate market in the Mediterranean”, says the Augsburg broker, who has been active in Greece for 20 years.

“Corona Effect”

The boom is also due to the pandemic: More and more self-employed people are relocating their home office from rainy northern Europe to the sunny south, and many holidaymakers are looking for the security of their own four walls in times of corona. This also makes Greek holiday properties interesting as investment properties for investors.

Buyers are queuing up not only in Ellinikon. It is a three and a half hour drive from Athens to Messinia, a largely unspoilt coastal region in the southwest of the Peloponnese peninsula.

This is where the Costa Navarino golf and beach resort is located, an extensive complex with two five-star hotels, holiday villas, a 4,000 square meter spa and thalassotherapy center, two designer golf courses and over 20 restaurants. The 230 to 300 square meter villas, located just a few meters from the beach or in the midst of evergreen olive groves, are in the price list from 1.25 million euros. Of the 80 planned units, 70 have already been sold.

The pandemic brought the Greek tourism industry the deepest crash in its history last year. The number of foreign holidaymakers fell by almost 80 percent. But while most of the hotel rooms were vacant, the demand for vacation properties was skyrocketing. Georg Petras speaks of the “corona effect”.

The German-Greek who grew up in Stuttgart is CEO of the German real estate broker Engel & Völkers in Greece. “Many former luxury hotel vacationers are now looking for the security and privacy of their own holiday residence,” says Petras. “We therefore experienced very high demand even during the travel restrictions,” reports the broker.

Home office by the sea

Petras sees an increased trend towards luxurious objects with high-quality furnishings. “The need for something special in their own four walls and the search for a place of retreat are now in the foreground for many interested parties,” says the market expert. “Thanks to remote working, many customers now spend more time in their second homes, and a home office by the sea is more interesting than ever.”

The most popular regions include the Cyclades with Mykonos, Santorin and Paros as well as the larger well-known islands such as Crete, Corfu and Rhodes. But smaller islands such as Antiparos, Milos, Kea or Symi are also becoming increasingly popular, reports Petras.

In addition to the use as a second home, investment aspects are increasingly coming to the fore. At Engel & Völkers, almost 45 percent of customers already buy their vacation property as a potential investment property. “Due to the still moderate prices, Greece offers excellent return options in many regions,” says the brokerage firm.

Depending on the location and equipment, Greek holiday properties cost between 2,000 and 6,000 euros per square meter. But it can also be significantly more. According to statistics from the Greek property appraiser Geoaxis, luxury properties are traded on the jet set island of Mykonos at average prices of EUR 12,488 per square meter. In Santorini, the median price for luxury properties is 10,335 euros.

This means that a price level that is unaffordable for most buyers has now been reached on these trend islands. Away from the hotspots, Greek holiday properties are still cheaper than in most other Mediterranean regions.

Recovery from the debt crisis

This is a consequence of the Greek sovereign debt crisis. It caused property prices to collapse by an average of 45 percent between 2009 and 2017. The market is now recovering. According to a forecast by Piraeus Bank, residential property prices will rise by an average of 4.9 percent per year over the next six years. The Piraeus analysts expect the strongest price increases by 2024 with a cumulative 22.8 percent. If you access it now, you can count on rapid increases in value.

The upswing in holiday properties is not only being borne by holidaymakers. More and more so-called digital nomads and wealthy retirees are among the foreign buyers. The real estate agent Christian Seyrer sees a trend towards year-round holiday homes. “That is why the focus is particularly on destinations that offer a mild climate, are easily accessible even in winter and have a good tourist and medical infrastructure,” says Seyrer.

As examples of such year-round destinations, Seyrer cites the southwest of the Peloponnese peninsula, Crete, but also easily accessible islands such as Lefkas in the Ionian Sea, which is connected to the mainland by a bridge. His customers are primarily looking for properties in the price range between 250,000 and 600,000 euros, reports Seyrer.

The trend is towards “self-sufficient vacations”, says Seyrer: “Many travelers want to be independent of the hygiene requirements and distance rules of the hotels.” The demand for holiday properties for rent is therefore increasing more and more and is now greater than the supply in Greece.

“We are primarily looking for new, well-equipped houses with modern, clear and light architecture,” the agent knows. But especially here the available offer is very small. “Building such a property for subsequent rental can therefore be very interesting for investors,” says Seyrer.

However, only foreigners who can supervise the project themselves, speak the local language or have absolutely trustworthy experts on site should trust themselves to build a new property.

Whether new construction or purchase: There can be pitfalls. “In many areas Greece does not yet have a cadastre, and there is often a lack of individual building and planning permits that must be obtained by the seller,” warns Dirk Reinhardt, partner in the Athens law firm MStR-Law.

Consult an advisor

The lawyer therefore urgently advises German property buyers to consult a lawyer and a civil engineer they trust to examine the property. Reinhardt recommends that the buyer should also choose the notary himself to conclude the sales contract. Fees and fees are largely a matter of agreement. For this, as well as for the broker’s commission and the real estate transfer tax, ten to 15 percent of the purchase price are to be set.

Anyone who accesses it now can save money, says lawyer Reinhardt, “because while first sales of new apartments are currently only due a real estate transfer tax of three percent, such sales are subject to VAT of 24 percent from January 1, 2023”.

After the purchase, the owner pays an annual property tax. It is 2.50 to 15.25 euros per square meter. The amount is based on the unit value determined by the tax authorities. In addition, there are basic community fees that are collected with the bills of the utility companies. Rental income in Greece is taxed up to 12,000 euros at 15 percent, up to 35,000 euros at 35 percent and above that at 45 percent.

In addition to the classic island destinations, the trend towards investment properties and year-round use is increasingly moving into focus as well as Athens and the Attic Riviera. Many luxury properties are currently being built in the Athens coastal suburbs of Glyfada, Voula, Kavouri and Vouliagmeni. The square meter prices are between 6000 and 10,000 euros, sometimes even higher.

The run on properties in Ellinikon shows that buyers can also be found at high prices. Due to the unexpectedly high demand, Lamda Development now wants to build 1,400 units in the first construction phase by 2026 instead of the originally planned 400 apartments.

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