The momentum that the real estate market has acquired in Greece, both in terms of sales and construction, is estimated to continue, despite the new uncertainties and challenges arising from the developments in the energy sector and the price increases of materials, as well as from the war in Ukraine, which creates new conditions in the international economy. In any case, as categorically stated by financial analysts and real estate professionals, it is too early to make safe estimates, as everything now changes. In this case, however, the crisis can be another opportunity, according to experts.

According to data published by the Bank of Greece, a significant increase of 9.8% was recorded, last year, in the prices of new apartments. In particular, it is estimated that, in the fourth quarter of 2021, the prices of apartments (in nominal terms) were on average increased by 9.1% compared to the corresponding quarter of 2020. More specifically, there was a 9.8% increase, in the fourth quarter of 2021, compared to the corresponding quarter of 2020, in the prices of the new apartments, i.e. those constructed up to 5 years ago, and a 8.6% increase for the old ones, i.e. those constructed more than 5 years ago. For 2021, the average annual growth rate of prices for new apartments was 7.4%, compared to an increase of 4.9% in 2020, while the average annual growth rate for old apartments was 6.9%, in 2021, compared to a 4.2% increase, in 2020.

Strong recovery of the sector is also predicted by various studies and assessments that see the light of day, with the most recent being a research by the Analysis Directorate of Cerved Property Services (CPS) for the Greek real estate market. According to this research, 2021 was a strong year for the Greek real estate market, while for the first half of 2022, it is predicted to be even stronger, as according to 61% of the network of CPS partners, the market will follow an upward trend, with 37% predicting that the market will remain stable, while only 2% expects shrinkage of the sector. CPS partners predict different trends for each real estate subcategory. According to Mr D. Papastamos, Director of Research and Assessments of Cerved Property Services, the recent geopolitical developments in Ukraine and the consequent international economic consequences are likely to adversely affect the expected course of the Greek real estate market, mainly in terms of of new constructions but also in terms of the possible postponement of the decisions of international investors regarding new plans in the Greek real estate. He emphasizes, however, that many times, of course, this volatile environment can be easily overturned and lead to an improvement of the market.

Construction – Prospects in energy constructions despite the difficult times

As Mr Iosif Arambatzis, CEO of the Epikyklos Construction company, characteristically points out to the Athens-Macedonian News Agency, “If the question is when is the best time to buy real estate in Greece, the answer is yesterday”. “Whoever did not manage to buy a real estate yesterday, then the best moment is today. We believe that, in the coming months, prices in many areas of Greece will have an upward trend “, adds Mr Arabatzis. He mentions three main reasons:

-Greece is one of the countries with the lowest prices in Europe, especially if the good quality of construction is taken into account in a large part of the offered real estate.

– The amount of licensed projects, along with any project currently being studied, is much larger than the country’s workforce, even if some projects are temporarily frozen, due to the war in Ukraine.

– The forthcoming tariffs on pollutants in Europe, due to the goals for a greener world, starting with the energy price crisis and with the consequent number of regulations, certainly cost a lot to the sector of construction.

As he points out, despite any developments, Epikyklos continues normally all the investment construction projects that have been planned. A series of energy-efficient apartment buildings with a number of new generation apartments that in a future grading of fines based on pollutants in real estate, these would be excluded as modern to a future world ahead of us. Such real estate in the construction sector is considered to be one of the best investments even in these difficult times we are going through, he then adds.

Developments depend on what will happen in the coming months

As the senior general manager of Piraeus Bank, Mr George Kormas, CEO of Piraeus Real Estate, of the Piraeus Bank Group, stated at the “Prodexpo North” conference in Thessaloniki, “The real estate sector has a strategic advantage, as it reacts to crises with time delay of about eight to ten months, depending on the property category. If in the meantime the crisis recedes, we won’t face any problem with price increases. In case of recession, this will also affect Greece, which before the Russian-Ukrainian crisis, was a hot spot for international investors, who saw our country as an investment destination”.

Answering the question whether the strong inflationary pressures will result in passing on costs in the construction of public sector projects and how their implementation will be affected, Mr Kormas estimated that “for the projects that will now be auctioned, we (the auctioneers) should listen the viewpint of those who will build them”, pointing out that a company that will sign a contract today, in six months it will have to face new conditions, so there needs to be some clauses.

The optimistic scenario for the economy still prevails

The Economic Analysis Division of the National Bank made a first comprehensive assessment of the effects of the war in Ukraine. The conclusions of the analysis point out that “we could argue that the new shock entails limited losses for economic activity in 2022 in Greece, which are expected to be reversed over a three-year horizon”. A view shared by the executives of Greek banks speaking last week at a major banking conference, as they acknowledged the new major challenges arising from the new uncertainties, estimated that the positive scenario for the Greek economy is still dominant.

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