Property prices increased by over 12% in 2022

The residential real estate market in our country continues to grow, with domestic and foreign investors looking for opportunities in an environment of rising prices that exceeded 12% for 2022, according to data from the Bank of Greece which have seen the light of day last week. Investments in residential real estate, as Antonis Fiorakis, the CEO of Protio, the first digital investment platform for apartments in Greece, reports to APE-MBE, have always been “high security”, or otherwise low risk, investments. These investments have a weighted return and have proven to be highly resilient to financial shocks and market volatility. By investing in a residential property, or apartment, you place your capital in an asset that generates income but also increases your capital along with the increase in its value, which can be achieved either over a 5-year time horizon or adding value through renovation and energy upgrading, he adds.
According to research results conducted by Protio’s investment analysis team, using advanced technology, data from the last three years was analyzed to determine the 10 regions with the highest returns. According to the results of the survey, these areas are: Aigaleo with 8.2%, Nikaia with 7.9%, Patisia with 7.8%, Attica Square with 7.7%, Omonia with 7.7%, America Square with 7.7%, Victoria Square with 7.3%, Piraeus 7.1%, Kypseli 6.9% and Kolonaki 6.8%.
The gross yield of a property, as mentioned by Antonis Fiorakis, is defined as the sum of the annual rents (i.e. 12 leases) times the purchase value of the property. The survey presents approximately the average neighborhood yield in terms of per square meter. In other words, if someone buys a property for 100,000 euros in a neighborhood with a yield of 8.2%, he could achieve an annual rent of around 8,200 euros or 683 euros per month. As Mr. Fiorakis points out, the above 10 areas are easy choices, as on the one hand they yield high yields of around 7-8%, while at the same time they bring together the characteristics of stability and low risk of residential real estate as well as high liquidity in case of renting but also sales. The research is based on rental and sales data of investment apartments of every floor and area from 20 to 120 sq.m. which according to Protio also achieve the maximum returns. An average property would be an apartment of 70 sq.m. with two bedrooms, a bathroom and a WC that can accommodate a couple or a young family.
The Head of Protio Investments Thrasos Kipourgos points out that the residential real estate market of our country follows an upward trajectory from 2017 until today, following the Western European economies with a phase difference in the longest period of economic development since 2009. This upward trend in our country remains resilient to this day despite the international unfavorable economic climate. In addition, it is noted that Athens remains the cheapest per square meter European capital, being an attractive option for all young as well as experienced investors.
New growth cycle for foreign investors
The real estate market is entering a new cycle of growth as foreign investors, such as Israeli funds, are expanding their portfolios, aiming for strong returns in the housing market, according to investment advisory company Real Vaha. Vassilis Pazartzis, founding partner of Real Vaha, which specializes in hotel and residential projects, told APE-MPE that the trend of investment in residential properties is increasing both in Athens and in Thessaloniki, as the scope for development for new hotels in the country is narrowing.
“Foreign investment in Greece is now moving into the next phase of development. The property market is showing signs of maturing and this is prompting investors from countries such as Israel, as well as Western Europe and the Middle East to seek opportunities in a wider range of properties. At a time when real estate markets in Europe are facing different challenges, confidence in Greek assets is high,” emphasizes Mr. Pazartzis.
Data from Real Vaha, which has a presence in Thessaloniki, Paphos and Berlin, shows where smart money is headed in the Greek market. Over 50% of Israeli funds and individuals active in the country’s hospitality sector now prefer housing, with an investment timeframe between 2-5 years. Long-term rental housing and student residences attract the most capital in projects of up to €30 million.
Despite the strong upward trend of the market, the real estate yields available in Greece are still higher than those offered in other countries, especially in northern Europe. Residential investments in Greece can offer returns of between 6-10% when in Germany property owners settle for 2-3%, Mr. Pazartzis adds. “Low supply is a key problem in Greece. Construction costs remain high while real estate prices continue to rise. Given the new market conditions, Real Vaha continues to invest and upgrade its services inside and outside Greece. Demand for Greek real estate is expected to remain strong for the next 1-2 years with buyers looking for opportunities across the spectrum of the market,” Mr. Pazartzis also estimates.
Bank of Greece – Property prices increased by over 12% in 2022
The prices of new apartments increased by more than 12% in 2022, while the growth rate of old ones stood at 12.2%. In particular, according to the data of the Bank of Greece, which comes from data collected by credit institutions, in the fourth quarter of 2022 the prices of apartments (in nominal terms) were on average increased by 12.2% in compared to the corresponding quarter of 2021, while for 2022 apartment prices increased at an average annual rate of 11.1%, compared to an increase of 7.6% in 2021.
The price increase in the fourth quarter of 2022 compared to the corresponding quarter of 2021 was 12.1% for new apartments, i.e. up to 5 years old, and 12.2% for old ones, i.e. over 5 years old . For 2022, the average annual rate of increase in prices for new apartments was 11.8%, compared to an increase of 8.2% in 2021, while the average annual rate of increase for old apartments was 10.5%, compared to an increase of 7, 2% in 2021.
From the analysis of the data by geographic region, it follows that the increase in apartment prices in the fourth quarter of 2022 compared to the corresponding quarter of 2021 was 15.2% in Athens, 14.5% in Thessaloniki, 10.3% in the other large cities and 6.3% in the rest of the country. For the whole of 2022, the price increase in the same regions compared to 2021 was 13.0%, 11.8%, 10.0% and 7.4% respectively. Finally, for all urban areas of the country, in the fourth quarter of 2022 apartment prices increased by 13% compared to the fourth quarter of 2021, while for 2022 the average annual increase was 11.5%.