Pitfalls of Buying Property in Greece: What Expats Need to Know
Learn moreOctober 21, 2024
In 2023, Greece's real estate market saw significant growth with rising property prices, making it one of Europe's most profitable markets alongside Portugal, Spain, and France. Athens, in particular, has caught global attention due to major real estate developments, especially in areas like Piraeus and the southern suburbs.
According to figures released by the Bank of Greece, home prices in Greece's urban areas went up by 10.76% in Q1 2024 from the previous year. Quarter-on-quarter, prices in these areas increased by 2.4% in the same quarter.
Despite strong growth, Greek house prices remained relatively lower than those in most European countries, attracting many foreign investors to the country. According to Greece’s National Economy and Finance Minister, Kostis Hatzidakis, there was a 39% increase in foreign real estate investments in the first half of 2024. Cushman and Wakefield's latest report also predicts continued growth in various regions, and with a projected GDP growth of 2.3% in 2024, foreign investors are encouraged to explore Greek real estate.
Here are 5 reasons why you should consider investing in Greek property.
Various property types, including retail spaces, industrial properties, and urban renovations, promise returns up to 50% higher, especially in prime locations like Omonia Square in Athens.
The report highlighted that the logistics real estate sector in Greece is expected to grow at 2.5%, surpassing Eurozone averages. This growth indicates a rising demand for operational space as businesses continue to expand, driving the need for more logistics facilities. In Q3 2023, approximately 120,000 square meters of industrial space was occupied. The rate of renting or purchasing industrial properties in Greece has exceeded previous years, reflecting strong market demand.
In Q3 2023, the office real estate sector saw a take-up of 50,000 square meters, with the technology sector driving demand in Athens. Office investment volumes reached €90 million, marking a 25% increase compared to last year.
The retail real estate sector experienced fifty-two transactions across various markets this quarter, a 30% rise from the previous quarter and a 25% increase year-on-year. Stable rental values on high streets and retail investment volumes totaled around €40 million.
In recent years, Greece has had attractive yields from short-term rentals. Apartments in urban areas, particularly Athens, are highly in demand. According to Global Property Guide, the average gross rental yield in Greece stands at 4.82% in Q1 2024, while the average gross rental yield stood at 5.22% at Q3 2023.
According to Ekathimerini, the commercial districts in Athens such as Plaka and Monastiraki, secured an average monthly income of some €3,200 euros during last year’s third quarter (July-September) through short-term rentals.
In the neighborhood of Koukaki, the average monthly income from short-term rentals was €3,010. This income is approximately three times higher than that from long-term rentals. In central Athens, the average monthly rental income from long-term leases does not exceed €1,000-1,200 (about €10-12 per square meter).
However, for new Golden Visa holders or current applicants, investors are no longer permitted to convert their property into short-term rentals on their property purchases. See more about this new legislation change here. Individuals from non-EU countries can now opt for the FIP or Digital Nomad Visa, if they wish to make a property investment for short-term rentals in Greece.
Home to Greece's main port and the 5th largest passenger port in Europe, Piraeus is considered to be a prime real estate area and one of the best places for investments in Europe. As the ancient port of classical Athens, Piraeus has maintained its significance and now thrives as an international hub. It provides excellent public transportation, including tram, metro to commute in the city, and ferry lines to other Greek islands.
Piraeus also offers access to attractions, parks, museums, and the University of Piraeus. China's COSCO Shipping's investment in the Port of Piraeus has propelled it past the 5 million TEU mark, boosting its global ranking and solidifying Greece's role as a leading regional transportation hub.
On the Athens Riviera constitutes the largest urban regeneration project in Europe, the Ellinikon, emerging on the grounds of the former Athens airport. This development promises a vibrant and sustainably city.
Thessaloniki, Greece's second-largest city, is experiencing a real estate boom. In 2023, apartment prices increased by 11.1%, with older apartments up by 10.5% and newer developments rising by 12.2%. Known for its rich cultural heritage, vibrant city life, and educational institutions, Thessaloniki is becoming an attractive option for long-term residential property investments.
Greece has tax treaties with many countries to prevent double taxation for foreign residents. Income from Greek properties is taxable only in Greece, while income from abroad can be tax-free. This favorable tax environment, combined with competitive property prices in rural and coastal areas, makes Greece an attractive investment destination. Property owners can expect annual returns of 4-5% from leasing.
Rental income is taxed progressively, starting at 15% for the first EUR 12,000 and rising to 45% for higher income brackets. Additionally, property owners pay the uniform real estate property tax (ENFIA), which ranges from about USD 5.40 to 10.80 per square meter annually, based on the property’s taxable value.
Greece, a top tourist destination attracting millions annually, presents excellent opportunities for property investors looking to rent out their properties. The country's positive economic growth makes it a stable and secure investment choice compared to other European regions. Meanwhile, the allure of the Mediterranean lifestyle has boosted the popularity of luxury beachfront villas, especially on the Greek islands, where international buyers frequently seek vacation homes.
Before making your investment, it is crucial to research thoroughly the area or neighborhood where you are looking to make your property investment. Additionally, you must also ensure that you have trustworthy professionals who know the local laws to guide through the process, if you are unsure proceeding on your own.
A list of documents is needed to buy property in Greece. These include:
Check out our guide on the property buying process in Greece.
For more information about the property buying process in Greece, book your complimentary 30-minute consultation call here.
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