Hello,
As every month, we bring you the hottest international real estate news from around the world.
This month we would like to draw your attention to:
A. Real estate prices in Greece are breaking records.
B. A new government in Greece. A change of prime minister in Romania.
C. JLL - the first quarter of 2023 was the weakest for real estate investors since 2012.
D. Businesses in Ukraine are trying to get back on track.
Enjoy the read,
Adv. Ilan Leibovitch and the office team
First round of loans under the “My Home” program
The “My Home” program is intended to enable young people and young couples in Greece, aged 25-39, to buy a first home with monthly payments significantly lower than mortgage repayments on the open market. 75% of the value carries no interest, and for couples with 3 or more children the entire amount is interest-free. Loans are approved subject to engineering and legal checks and the approval of the financing bank
A first round of loans under the program was approved at the end of June, with about 70% of the applications approved (17,606 loans). For 28% of the approved applications the property has already been approved, and the average loan value stands at about 105,000 euros. Of all the loans approved, 62% are to couples. For 87% of the approved borrowers, total annual income does not exceed 24,000 euros.
A new government in Greece
On June 26 the new government headed by Kyriakos Mitsotakis was sworn in, after the conservative New Democracy party won about 40% of the vote and 158 of the 300 seats in the Greek parliament in the elections.
Mitsotakis made several changes in the new government, among them appointing the foreign minister of his previous government, Nikos Dendias, as defense minister, and former transport minister George Gerapetridis as foreign minister.
Real estate prices in Greece are breaking records
The pace of increase in apartment prices is breaking records, according to data collected by the Bank of Greece for the first quarter of 2023. On an indicative basis, prices rose by 14.5% compared with the first quarter of 2022 across Greece as a whole, with even higher increases in the two largest urban centers, which reached 16.5% in Athens and 16.1% in Thessaloniki.
Similarly, prices in other large cities rose by 13.1%, while in the rest of the country they also jumped by 13.1%.
In the fourth quarter of 2022, the annual price increase reached 15.2%, the highest performance in decades. Similarly, in Thessaloniki the increase reached 14.5% in the last three months of 2022.
In Athens, prices have jumped by 68% since the first quarter of 2017. In reality, the price increase in Athens is significantly higher than the national average, which stands at 49% for the period 2017-2023 (Q1). Newly built properties recorded a large increase of 12.8%, while second-hand properties recorded an increase of 15.6% compared with the corresponding period in 2022.
The Bank of Greece (BoG) also updated its figures for the whole of 2022, reporting an increase of 11.7% compared with an increase of 7.6% in 2021. Likewise, according to the updated data, the average price increase for older apartments was 11.3% compared with an increase of 7.2% in 2022, while the average price increase for new homes rose by 12.2% in 2022 (from an increase of 8.2% in 2021).
In addition to local demand, Athens's sharp price increase during the first quarter of the year is undoubtedly attributed to the fact that it is a key destination for foreign investors.
This year there has been an especially unusual increase in foreign investment through the Golden Visa program, because of the upcoming changes, which will make it harder to obtain a residence permit.
The minimum investment threshold for buying properties in central Athens, the northern and southern suburbs, Santorini, Mykonos and Thessaloniki will double (from August 1) to 500,000 euros.
Changes in the Romanian government following the rotation agreement
In the first half of June there was a change in the Romanian government, when Marcel Ciolacu, chairman of the Social Democratic Party, replaced the chairman of the Liberal Party, Nicolae Ciucă, who was appointed president of the Romanian Senate. This was in accordance with an agreement signed in 2021, intended to create governmental stability.
Defense Minister Angel Tâlvăr (PSD), Education Minister Ligia Deca (PNL) and Transport Minister Sorin Grindeanu (PSD) remain in their posts.
Apartment prices in Romania - June 2023
In 6/23 the upward trend in the average price continued, across the whole country.
Investing abroad? The first quarter of 2023 - the weakest since 2012
According to a review by JLL, the first quarter of 2023 was the weakest in global real estate transaction volume since 2012: residential real estate transactions plunged by 65%, and the volume of real estate investment fell by 56% compared with the same quarter last year, from 291 to 128 billion dollars. The decline was recorded in all regions - 61% in the Americas, 58% in Europe and the Middle East, and 30% in Asia Pacific - alongside a sharp drop in the leasing of logistics complexes and in the office market. According to the review, the US was the main destination for Israeli institutional investors this quarter, with almost a third of their real estate investments abroad, followed by Germany and the UK. Ziv Shor, CEO of JLL Israel, attributes the weakness in the office market to the difficulty of bringing employees back to offices since COVID, and the market's stagnation to a combination of high interest rates and inflation.
Source: Merkaz Hanadlan (Real Estate Center), Roni Lifshitz, 30.05.23
After the economic collapse, businesses in Ukraine are trying to get back on track
A report by Payoneer, which surveyed about 2,300 small and medium-sized businesses in Ukraine, points to signs of recovery in the country's economy after the severe damage of the first months of the war, during which about half of economic activity stopped and the damage to businesses was estimated at 83 billion dollars. According to the report, 44% of businesses are optimistic about their ability to get through 2023, 69% reported that all their team members are in the country, and about half reported expansion in 2022. However, 56% of businesses defined maintaining the status quo as their main goal for the coming year, and 64% do not plan to hire new employees.
Source: N12, Ayelet Baron, 26.05.23
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