Having Bottomed Out Since 2008, Athens' Real Estate Market Stabilizes

As Greece officially exited its international bailout on Aug. 20, one indicator of confidence in the country is its tentatively stabilizing real estate market — especially in the capital, Athens.
Athens – responsible for generating around 19 percent of the country’s GDP – will be at the forefront of real estate price increases, which Trading Economics forecasts say are expected to reach 22 percent until 2020.
However, the real estate market in Athens is far from uniform, with some districts going up and others down, and all affected by property taxes, in some cases the taxes far outstripping the market value of the property.
Greek Reporter spoke to a leading real estate professional who has been in the business since throughout the crisis. ‘Giannis’ (not his real name) was able to lift the lid on how properties in different parts of the city first lost, then began to regain their value amid Greece’s worst-ever economic downturn.
Two years after the Europe-wide financial crisis of 2008, rental and sales prices in Athens overall were down for three to four years, Giannis says.
The crisis saw no new buildings as construction largely ground to a halt. Giannis saw that by 2012, owners who had three or more properties were selling their assets to have cash, as families moved back into one property to keep up mortgage repayments.

According to the Bank of Greece, residential property prices have fallen by 42.8 percent (-45.9 percent in real terms) from 2008. Athenians were particularly exposed to trouble in the housing market as, by 2009, 22.1 percent lived in households where more than 40 percent of their disposable income was spent on housing – the third highest rate in Europe.
Overall, Giannis says, the residential property market saw a 65-percent dip in the eight years prior to 2015, when a modest recovery began, particularly in Athens’ historic city center.
In 2008, 100-square-meter apartments in the Piraeus districts of Keratsini, Perama and Drapetsona were selling for around €120,000; now similar properties are going for around €40,000-50,000.
Other areas like Ekali and Palaio Psychico also saw a fall to €160,000-200,000 as the crisis bit; before 2008 sellers could command double those amounts in these two districts.
In the city center, prices have recovered thanks to Greece’s undiminished tourist trade. Greece remains a safe and stable destination, visited by millions each year. This creates demand for accommodation meaning rental residential and hotel real-estate prices in the city centre – while relatively low compared to the rest of Europe – represent good investment options.
Other investment options include the purchase of fixer-upper properties, particularly in the central districts. Some properties are retailing for only €3,000-4,000 – or as Giannis puts it – “less than the price of a second-hand car, in some cases”.
As the Athens market recovers, fueled by rising employment, steady tourism, ‘golden visas’ for foreign investors and streamlined taxation and red tap, it is worth pointing out that prices are not uniform in each district.
Giannis points to the central district of Koukaki — within striking distance of the Acropolis. It is not exclusively expensive and has become a patchwork of different prices. One apartment can go for €150,000 for 50 square meters while, three streets away, the same type of property can go for €40,000-50,000.
The wide variation in prices is also influenced by the property-tax regime. The Single Property Tax (ENFIA) where vast discrepancies between a property’s market value and its tax rate can skew the market and put off buyers.
Kathimerini newspaper in June reported on these gaps. Central areas like Kallithea and Kato Patissia – home to large amounts of housing stock over three decades old – can see the taxes dwarf the actual €450,500 per square meter cost. Central Athens districts like Pangrati and Exarchia were also reported to have ENFIA rates which were double the per-square-meter price tag.
Giannis points to districts like Elliniko – the site of the city’s former airport – as a place where foreign investment and infrastructure spending is spurring price growth. More central areas seeing rising prices are Koukaki, Exarchia, Kalithea-Fix and Gazi, with seven-out-of-ten sale customers paying in cash. Many of these buyers are foreign, mainly from China, Lebanon and Russia, availing of a Greek government ‘golden visa’ scheme for investors.
On the flip side, the district of Patissia is seeing a downturn amid a problem with crime and drugs in the area and whole apartments going for as little as €4,000-7,000.
Giannis looks ahead to a rising real estate scene in Athens as the market has already bottomed out during the crisis. With tentative signs of growth in the economy, even some construction has begun again.