Hello,
As every month, we bring you the hottest real estate news from around the world.
This month we want to draw your attention to:
A. The continued trend of rising real estate prices in Greece.
B. The increase of the minimum wage in Romania to 3,000 lei from 1/1/2023.
Enjoyable reading,
Ilan Leibovitch, Adv., and the office team
Growth in the third quarter
According to the Hellenic Statistical Authority, the Greek economy grew by 2.8% in Q3 2022 compared with Q3 2021, but this is a decline of 0.5% compared with Q2 2022. So far, growth of 2.2% was recorded in Q1 2022 and of 0.6% in Q2 2022, with a decline of 0.5% in Q3 2022.
The recovery in Greek residential property prices strengthened in the third quarter
According to data published by the central bank, the third quarter saw a renewed rise in the Greek residential real estate market (the rate of growth in apartment prices rose from 10.1% in Q2 2022 to 11.2% in Q3 2022), as the country's economy grew and inflation climbed to levels not seen in three decades.
The upward trend benefited all markets, including old and new apartments, and all regions, although price increases in the capital, Athens, led the rises.
Prices rose 13% year on year in Athens, where home-sharing platforms such as Airbnb have become popular.
7.7% rise in the number of new apartments built in Hungary since the start of the year
Of the 13,617 apartments completed in Hungary since the start of the year (an increase of 7.7% compared with the corresponding period in 2021), about 46% are detached houses. Since the start of the year, building permits have been issued for 25,984 new apartments (a decrease of 11% compared with the corresponding period in 2021).
The average price of a second-hand apartment in Hungary stands at 524,000 HUF/sq.m., with the most expensive city being Debrecen (225 km east of Budapest), where the average price per sq.m. is 713,000 HUF.
The European Commission recommends not transferring about 7 billion euro that were due to be transferred to Hungary
The European Commission proposes not allocating 7.2 billion euro of European Union funds to Hungary until Orban's government implements reforms to strengthen the rule of law and fight corruption. The Commission defined 27 steps that Hungary must take in order to receive the funding.
It was determined that Hungary did not meet the agreed commitments to address the problems by 19/9. The European Commission therefore proposes taking measures “to protect the budget”.
The Commission recommends that Hungary strengthen the independence of the courts, make public procurement more transparent, and so on. If the recommendations are not met, all current and future payments will be blocked.
The European Council will make the final decision on freezing Hungary's funding on 19 December.
RE/MAX study shows that about a third of Romanians are looking for a home
Among the biggest changes of 2022 compared with the previous year are the rise in the number of people interested in buying a home, those interested in moving from an urban to a rural area, and those interested in buying a home abroad. According to the study, most Romanians are homeowners, while a large share of them tend to buy a property. Despite the rise in the cost of living, the study shows a net increase of 23% in the number of people looking to buy a property in Europe compared with 12 months earlier.
1 in 3 Europeans are looking to invest in residential real estate, at home or abroad, and are ready to act, with those aged 26 to 45 more likely to invest. This is most pronounced in Portugal (+40%), Finland (+36%), Bulgaria (+35%) and Romania (+30%), where a considerable minority of respondents are more inclined to look for a new home.
According to the study, a large share of Romanians already own their homes (72%), more than 10% above the European average. Among those considering moving to a new home, 15% plan to do so within the next year, and about 25% plan to do so within the next three years. While the majority (54%) plan to stay in an urban area, 29% of Romanian respondents said they want to move to the countryside, and 35.6% of respondents do not rule out moving abroad, one of the highest percentages in Europe (in Turkey, the leader in this respect, the figure stands at 45%). When looking at homes, space matters to Romanians. 38% of those now considering a possible move said they want more space, a factor that is even more significant for those considering a move to a rural area (60%). As for apartments versus houses, 42% of those considering moving said they are interested in buying an apartment, while 26% of all potential buyers were looking for a detached house, rising to 31% among those looking to move to the countryside.
The survey also showed that Romanians are concerned about the environmental impact of buying a property. 39% above the average indicate that they would be willing to choose a smaller property if it proved beneficial to the environment, and only 24% said they would not be willing to accept any compromises. At the same time, the likelihood of considering an urban location for its environmental advantages is among the highest in Europe.
Office rents in Bucharest are among the lowest in the region and in Europe
According to a report by the consultancy Cushman & Wakefield Echinox, office rents in Bucharest are among the lowest in the region and in Europe.
Although rents in Bucharest continued to rise in the third quarter, reaching 19.5 euro/sq.m. per month, compared with 18.5 euro/sq.m. per month at the start of the year, Bucharest remains among the least expensive cities in Europe in terms of office occupancy costs.
For comparison, rents in Budapest and Warsaw are 24.5 and 24 euro/sq.m. per month, respectively, while in Prague the level is even higher, reaching 27 euro/sq.m. per month. In Sofia, offices are leased for a maximum of 15 euro/sq.m. per month.
Together with the availability of labor and competitive wage costs (the average annual income of IT&C professionals in Bucharest is 40% lower than the level recorded in Warsaw and is only 50% of the income in Prague), the low office rents could make Bucharest an attractive technology hub.
The report notes that “Bucharest is without doubt one of the main technology hubs in Central and Eastern Europe, taking into account the investments made in recent years by companies active in this sector. From a real estate point of view, IT&C companies have leased over a million sq.m. of offices in Bucharest alone during the last decade, with a share of almost 40% of transaction volume in the period.”
222,600 sq.m. of office space were delivered in Bucharest between January and September, a figure reflecting an increase of 5% compared with the corresponding period last year. The vacancy rate in the city fell slightly to 14.4% in the third quarter.
Financial aid to Ukraine
The European Parliament approved aid of 18 billion euro to Ukraine in order to survive the war and begin rebuilding the country.
Correction or collapse? Real estate markets in Europe record sharp price declines
The article reviews the price declines in European real estate markets against the backdrop of interest rate hikes and the end of the era of cheap money. In Germany, housing prices fell in the third quarter of 2022 by about 4.3% compared with the previous quarter, after more than a decade of increases, and in Sweden prices fell by about 14% on average within seven months. In Britain, the number of inquiries from new buyers fell to a low not seen since 2008, and a Bloomberg study estimated that prices could fall by about 20% by next year. An Oxford Economics analysis estimated a price decline in nine out of 18 developed economies.
Source: Globes, Assaf Oni, 28.11.22
Accurate as of the issue date. Laws, tax rates and procedures change; check the current position before any decision.
Translated from the Hebrew original. עברית