Hello,
The holidays are behind us, and the Knesset has begun discussing the 2025 state budget, which, as mentioned, also includes planned decrees in the real estate field that may affect the investments of Israelis in Israel and overseas. At the same time we are witnessing continued rises in apartment prices in all the surveyed countries where our office operates; for example, in Romania an average rise of 13.2% was observed in the period 9/23-9/24, while in central Athens an average rise of 8.9% was reported for apartments between Q3/24 and Q3/23.
This month we would like to bring to your attention:
A. Apartment prices in Greece continue to rise.
B. On 24/11 a referendum will be held in Bucharest dealing, among other things, with the question of granting building permits in the city.
C. The Romanian construction company Nordis was declared insolvent and left behind a trail of harmed buyers.
D. Bulgaria ranks 2nd in the world in apartment price rises in 2024.
E. About half of the properties sold in Cyprus are luxury properties.
Wishing us all quiet and safe days, and enjoyable reading,
Ilan Leibovitch, Adv., and the office team
Greece
The younger generation turns to the rental market
A survey conducted for the Athens Chamber of Commerce shows that 76% of respondents took part in the rental of a residential home, as owners or as tenants. It follows that housing is the main activity in the real estate market, since most are interested in renting a home, while 55% were engaged in buying and selling a home, as buyers or sellers.
After a residential apartment, a commercial property is the second most common category of transactions. Here 30% of survey participants said they rented commercial space, while 10% bought or sold a commercial property. This points to the tendency of business owners in general to rent business premises rather than buy a commercial property, choosing to rent.
In addition, a considerable share of transactions (26.1%) involve the purchase and sale of plots, indicating a demand for land ownership, perhaps for construction or future investment. By contrast, renting plots is extremely rare, with only 3.4% of respondents having rented a plot.
In terms of demographic differences, renting a home is more common among young people. According to the survey, more than 80% of respondents under the age of 49 rent a home, while the percentage falls in older age groups, to 74% for ages 50-59 and 71% for ages 60 and above. The opposite is the case for buying and selling real estate, where at least one transaction was carried out by more than 64% of people over the age of 60, a significantly higher percentage than the 55% of people in the 50 to 59 age category, with rates falling below 50% in younger ages.
Participation in buying and selling real estate is greatly influenced by family income and level of education. The higher these are, the higher the participation in purchase and sale transactions. For example, about half of those with primary or secondary education bought or sold a home, while this figure rises to 58.2% among holders of a master's degree or doctorate.
When examining the likelihood of a real estate transaction in the next five years, 77% of participants consider the chance of a future real estate transaction likely, while 11.5% consider it unlikely and almost 12% remained undecided.
An average increase of over 78% in apartment prices over the last 10 years
According to a document published by GEOAXIS, a certified property valuation company in Greece, the average value of every type of apartment has risen by more than 78% in the last decade, with prices close to doubling.
In particular, according to GEOAXIS, between the third quarter of 2023 and the third quarter of 2024, a median annual rise of 8.51% is recorded for recently built apartments and 7.81% for older apartments. The significant rise in values is explained by a large reduction in supply (thanks to an excellent tourist season and Airbnb).
According to GEOAXIS, the security offered by the country, combined with the Golden Visa program and the fact that local real estate is still cheap relative to Europe and other countries (for example Israel), will continue to drive significant foreign funds into the residential real estate market.
Demand from local investors (institutional and non-institutional) appears to be continuing since funds are available despite the high interest rates. According to their analysis, the market has not experienced bubble conditions, since the level of supply (especially of new apartments) is still very limited relative to demand.
Meanwhile, this month ELSTAT (the Hellenic Statistical Authority) announced that the price of new apartments rose by 2.9% in the 3rd quarter of 2024 compared with the corresponding quarter in 2023.
In parallel, the construction price index for new residential buildings showed in the 3rd quarter of 2024 a rise of 0.7% compared with the index of the 2nd quarter of 2024.
Romania
Israeli businessman Benny Steinmetz, convicted in Romania in the Baneasa farm affair, was arrested in Greece
Benny Steinmetz was arrested in Greece (for the 2nd time) when he landed this month in Athens on a private flight from Tel Aviv, after on the previous occasion his extradition to Romania was refused by the Greek court.
Steinmetz was sentenced in 2020 to five years in prison, but fled Romania before the sentence was handed down, was first arrested in Greece in 2021, where he was released on bail. In September 2023 he was arrested in Cyprus. In November 2023 Steinmetz was released and the Court of Appeal in Nicosia rejected his extradition to Romania.
In December 2020, the Israeli tycoon Benjamin Steinmetz was finally sentenced in absentia by the Supreme Court to 5 years in prison, to be served, in a trial over the unlawful restitution of the Royal Farm of Baneasa and the Snagov forest. An international arrest warrant was subsequently issued against him.
On May 18, 2016, Remus Truică, Paul Philippe, Dan Andronic, as well as the businessmen Tal Silberstein, Benjamin Steinmetz and Moshe Agbi were brought to court by the DNA (the Romanian anti-corruption directorate) in the case.
Steinmetz has another prison sentence in Switzerland. In January 2021, a court in Switzerland sentenced Steinmetz to five years in prison for bribing public officials in Guinea in the mining license case.
Insolvency proceedings against the real estate company Nordis
The court in Bucharest decided on October 7 on the insolvency of Nordis Management, one of the leading real estate developers in Romania, following a request by about 80 creditors who had signed preliminary agreements with the company to buy apartments and agreements to provide services or perform work for the company.
As of the time of writing, the number of the company's creditors has grown to more than 220, among them security companies, the municipality of Sinaia, many apartment buyers and more.
Nordis Management is building several projects in Bucharest and Mamaia, and was considered one of the leading development companies. Among the shareholders are Vladimir Ciorbă, husband of the member of parliament Laurei Vicol of the Social Democratic Party (PSD), who holds 46% of the shares, Emanuel Poștoacă, who also holds 46% of the shares, and Alexandru Mihai, who holds 8% of the shares and also served as the company's spokesperson and sales manager.
The meaning of the proceeding is that dozens and perhaps hundreds of apartment buyers are at this stage left empty-handed, since in Romania, unlike Israel, there is no law guaranteeing buyers' funds similar to the Sale Law (Assuring Investments of Apartment Buyers).
A Romanian's purchasing power is less than half the European average
According to a new study that was published, purchasing power per capita this year in Romania totals 9,092 euros, which puts Romanians almost 52% below the European average and improves their ranking by one place to 32nd.
The European average rose to 18,768 euros. However, the report found significant differences among 42 European countries, with people in Liechtenstein, Switzerland and Luxembourg having a much higher net income than in the rest of Europe, while purchasing power is lowest in Kosovo, Belarus and Ukraine.
As in previous years, Bucharest takes first place among Romania's counties by a clear margin. With purchasing power per capita of 18,580 euros, more than twice the national average, available for spending and saving. More importantly, Bucharest is the only region in Romania that reached the European average purchasing power for the first time.
Cluj comes second in Romania with average purchasing power per capita of 14,598 euros, followed by Timiș - 14,098 euros, Ilfov - 13,801 euros, Sibiu - 11,805 euros and Brașov - 11,372 euros. The national top 10 is completed by Prahova, which rose three places to seventh with average purchasing power of 9,415 euros, Arad - 9,283 euros, Constanța - 9,280 euros and Alba - 9,271 euros.
All the counties in the top 10 have purchasing power above the per capita average. Argeș is also approaching the national average, with people there having 9,105 euros.
On 24/11, in parallel with the elections, a referendum will be held that will affect the future of construction in Bucharest
The Romanian Parliament approved that the residents' referendum requested by the mayor of Bucharest will be held in parallel with the Romanian presidential elections on November 24.
The mayor of Bucharest, Nicușor Dan, first announced his intentions to organize a residents' referendum after the local elections in June, in which he won, with about 47% of the votes. He seeks to become the sole approver of new residential projects and to increase the control of the General Council over the taxes that Bucharest residents pay to the sector city halls.
The three questions on the referendum ballot will be:
- Do you agree that the distribution of income taxes and local taxes collected from Bucharest residents by the Bucharest City Hall and by the sector city halls should be approved by the General Council of the Bucharest City Hall?
- Do you agree that the General Mayor of Bucharest should issue building permits for the entire administrative territory of the city?
- Do you agree that the Bucharest City Hall should fund and implement a health education and drug prevention program in all schools in Bucharest?
Together, the first two questions strengthen the standing of the General Mayor of Bucharest relative to the sector city halls. The third was added by PSD council members, but Mayor Nicușor Dan said he welcomes a more active role for the Bucharest City Hall in the fight against drugs as well.
Cyprus
More than 50% of the apartments/houses sold in the first half of 2024 were luxury properties
According to a report by Cyprus Sotheby’s International Realty (based on data from the Cyprus Land Registry), in the first half of 2024, 6,851 residential properties were sold in Cyprus for a total of 1.8 billion euros. Almost a third were luxury properties - houses above 500,000 euros and apartments above 200,000 euros - and with a market value of one billion euros, they accounted for over 56% of the total value of the residential market.
Limassol and Nicosia remained the most popular areas for buying homes in the second quarter of 2024, with sales by district reaching 27% and 25% respectively. They are followed by Larnaca (24%) and Paphos (18%).
Properties sold to foreign buyers from European Union countries totaled 866 transactions, accounting for 13% of residential sales. There were 2,043 sales to foreign buyers, resulting in 30% of residential sales, attributed mainly to the Larnaca and Limassol areas. According to Sotheby’s real estate expert, a permanent residence program through investment is the main driver of demand from citizens who are not EU residents, while buyers in the European Union choose Cyprus for the lifestyle on offer, including the sunny climate all year round and the cost of living.
According to the Cyprus Land Registry, 3,409 property sales were carried out in the 2nd quarter of 2024, with a total value of 933 million euros.
In the luxury real estate market, 919 transactions were recorded in the 2nd quarter of 2024, accounting for 27% of all transactions for the period. These transactions were valued at 495 million euros, accounting for 53% of the total market value.
For the first half of 2024, luxury property sales totaled 2,002 transactions, with a cumulative value of 1 billion euros.
In Limassol, 908 residential real estate transactions were recorded in the 2nd quarter of 2024, 52% (472 properties) of which were in the luxury sector. There was significant demand for apartments priced above 200,000 euros, with 418 transactions accounting for 54% of the total in this price segment in Cyprus, and for houses priced above 500,000 euros, 54 transactions accounting for 37% of the total in that price range.
In Paphos, 610 residential real estate transactions were recorded in the 2nd quarter of 2024, 23% (138 properties) of which were in the luxury sector. During this period, 50 houses priced above 500,000 euros were sold, accounting for 34% of these sales in Cyprus, together with 88 apartments priced above 200,000 euros, accounting for 11% of total sales in Cyprus.
In Nicosia there were 849 residential transactions in the 2nd quarter of 2024, with 18% (150 properties) in the luxury market segment. Demand for luxury residential properties in Nicosia is moderate, as reflected in the sales of 25 houses (17% of the national total) and 125 apartments (16% of the national total) in this period.
In Larnaca, residential transactions totaled 834 in the 2nd quarter of 2024, with 17% (139 properties) falling in the premium market segment. Luxury residential properties in Larnaca resulted in the sale of 10 houses priced above 500,000 euros (7% of the national total) and 129 apartments priced above 200,000 euros (17% of the national total).
In Famagusta, in the 2nd quarter of 2024, the market recorded 208 residential real estate transactions, of which 10% (20 properties) were in the luxury segment. Demand for premium residential properties in Famagusta shows growth potential, with the sale of 7 houses (5% of the national total) and 13 apartments (2% of the national total) in the premium category in this period.
Bulgaria
Bulgaria sees a significant rise in real estate prices, ranked second in the world in 2024
Real estate prices in Bulgaria continue to experience significant growth, with data from the National Statistical Institute indicating a rise of 15.1% during the last 12 months through June 2024. In the second quarter of the year alone, prices rose by 3.4%. This impressive rise places Bulgaria among nine European Union countries that have seen property prices rise by more than 100% over the last 14 years, according to Eurostat.
In the global house price index of the consulting firm Knight Frank, Bulgaria ranks third over the last 12 months, preceded only by Turkey and Poland, where property prices rose by 46.4% and 18% respectively. Bulgaria's growth of 15.1% makes it one of six countries out of 56 analyzed that reported a rise of more than 10%. After Bulgaria come Taiwan (+11.9%), North Macedonia (+11.5%) and Colombia (+10.9%).
By the end of 2024, Bulgaria is expected to be second in the world in property price strengthening, behind only Turkey. Bulgaria's forecast growth stands at 10.8%, while Turkey is expected to lead with 14.4%. Poland and Norway are expected to see growth rates of 9.3% and 8.3% respectively. The most significant declines in property prices compared with the end of 2023 are expected in Finland, China and Ukraine.
Offered an investment apartment abroad for 200 thousand euros? How much will it really cost you
The article deals with the wave of purchases of investment apartments abroad by Israelis, mainly in Cyprus, Greece and Portugal, and presents six rules of thumb for evaluating such a deal. Among other things, it notes that in Greece the purchase tax is 3.09%, and together with the lawyer's fee, brokerage, notary and registration the addition reaches about 8% of the property price, and during the holding period tax on rental income and management fees also apply; exposure to the exchange rate is also mentioned. The article describes a case in which Israeli investors who bought shares in projects in Canada, marketed to them with a “guaranteed yield”, ended up in court after the yield stopped being paid and it became clear that the prices they paid were higher than market prices. According to the article, those who bought a few years ago enjoyed price rises and low interest rates, while buyers today face higher prices and high mortgage rates.
Source: Globes, Arik Mirovsky, 24.10.24
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