Hello,
Apartment prices kept rising in 2024. According to the preliminary data we collected, the average increase was about 8% in Greece and about 14% in Romania.
This month we would like to bring to your attention:
A. The International Monetary Fund report on the Greek economy.
B. Rising real estate prices in Romania - a preliminary summary for 2024.
C. Rising real estate prices in Cyprus.
D. The best countries for real estate investment in Europe.
Wishing us all quiet and safe days, and enjoyable reading,
Adv. Ilan Leibovitch and the office team
Greece
Rising real estate prices in Greece: trends and insights for the fourth quarter of 2024
According to the Spitogatos Price Index (SPI) report, real estate prices across Greece continued to climb in the fourth quarter of 2024. The increases are driven by a combination of factors, including strong demand from buyers and investors and the launch of new housing programs such as “My Home 2”. These trends are shaping the landscape for both home buyers and tenants, with some areas emerging as particularly expensive while others remain more affordable.
Price trends: a growing market
In the fourth quarter of 2024, the Greek real estate market continued to show a positive trajectory. The average sale price of properties rose 7.9% year over year (YoY), reflecting strong demand for real estate despite the ongoing economic challenges. Compared with the previous quarter (Q3/24), the increase was 2.2%. Rents also rose, by 5.8% over the year, although rents remained stable compared with Q3/24.
Several key factors are driving the price increases.
- High demand from both buyers and investors plays a significant role, as large urban centers and popular tourist destinations consistently attract attention from local and international markets alike. Cities such as Athens, Thessaloniki and some of the islands remain an excellent choice, especially in areas with growing tourism.
- The recently launched “My Home 2” housing program has boosted market optimism even further. This initiative, which aims to stimulate demand by offering favorable terms to first-time home buyers, is generating significant interest and contributing to the rise in prices.
The most expensive and the most affordable areas in Greece
The analysis yields some interesting findings.
The most expensive areas for buying and selling
The southern suburbs of Athens continue to lead as the most expensive real estate markets in Greece. The average price of buying a home in the southern suburbs of Athens is 3,895 euros per sq.m. Other areas, such as the Cyclades islands, the northern suburbs of Athens, Lefkada and Chania, also rank high in terms of price.
The most expensive areas for renting
The rental markets follow a similar pattern, with the southern suburbs of Athens once again at the top of the list.
Attica and Thessaloniki: price trends in major cities
Attica and Thessaloniki are two of the most important real estate markets in Greece, showing notable price trends in both home sales and rentals. In this section, we examine the latest developments in these key cities and what they mean for buyers and tenants. Let us look at the details.
The Attica region, including Athens and its surroundings, continues to experience some of the sharpest increases in both sale and rental prices for residential properties. The real estate markets in Attica and Thessaloniki are very diverse, with property prices varying significantly by location. From bustling urban centers to quiet coastal areas, certain neighborhoods stand out for their high prices, for both sales and rentals.
Sales: the areas with the largest price increases in Q4/2024 include Piraeus (where areas such as Tabouria - Agia Sofia saw an increase of +27.6%), and central Athens saw a notable increase of +22.7%.
The most expensive areas for buying a residential property in Attica include Vouliagmeni (7,216 euros per sq.m.), Voula, Glyfada, Kolonaki - Lykavittos and Elniko.
Rentals: rents in Attica also showed significant growth. The rental market in central Athens jumped by +26.4%, highlighting the continued demand for properties in the city. Vouliagmeni remains the most expensive area, with an average price of 19.9 euros per sq.m. It is followed by Filothei, Kolonaki - Lykavittos, Glyfada and Vari - Varkiza.
Similarly, Thessaloniki is seeing an upward movement in both sale prices and rents.
The International Monetary Fund report on Greece
Greece's short-term economic outlook remains positive, with real GDP maintaining its strong growth, the International Monetary Fund (IMF) stated in its report on the Greek economy.
The public debt-to-GDP ratio is on a steady downward path, against the backdrop of continued fiscal adjustment, supported by significant progress in reducing tax evasion.
The economy maintained its strong growth in 2024, supported by robust domestic demand.
Real GDP grew by 2.3% (annualized) in the first three quarters, boosted by a sharp rise in investment projects financed by NGEU (the EU's Recovery and Resilience Facility) and by strong private consumption, supported by rising real income.
The unemployment rate fell to 9.5% (seasonally adjusted) in Q3/2024 - the lowest level since 2009. The job vacancy rate increased, reflecting labor shortages in certain sectors, mainly construction, tourism services and high-skilled sectors.
The labor force participation rate rose gradually but remains among the lowest in the European Union, particularly for women. Inflation is gradually declining, with average inflation at the end of 2024 standing at 2.9% and 3.4% (annualized) respectively, despite persistent inflation in services and wage growth. The removal of a significant pension burden for retirees returning to the labor market significantly increased the number of working pensioners in 2024.
Bank credit growth to the private sector accelerated to 9.4% (year over year) in Q4/2024, accompanied by continued increases in property prices. Strong domestic demand for imports, driven by investment, also contributed to the widening of the current account deficit to 6.9% of GDP in 2024.
Following the significant expansion of solar and wind energy capacity in recent years, renewable energy sources now account for about 50% of total electricity generation.
The Fund states that real GDP growth is expected to remain high at 2.1% in 2025, before moderating in the medium term.
Investment will continue to be a key driver of growth, supported by NGEU-financed projects. Private consumption growth will remain strong, supported by positive growth in employment and income. As global energy prices stabilize, headline inflation is expected to continue its downward trend.
The report recommends additional efficiency-enhancing measures that would further strengthen Greece's public finances - continued reforms are needed to improve the planning and management of public investment, including by strengthening central coordination and procurement processes. It recommends protecting non-pension social spending, such as health and education, in order to promote more inclusive growth. The report also recommends avoiding excessive increases in pensions and public-sector wages, and ensuring that pension increases follow the established indexation formula without extraordinary adjustments.
Romania
Rising real estate prices in Romania: a preliminary summary for 2024
According to data from the website imobiliare.ro, apartment prices in Romania rose by 14% during 2024, with the average price per sq.m. standing at 1,710 euros/sq.m. at the end of the year.
In Bucharest prices rose by an average of 15% in 2024, with prices of new apartments rising by an average of 21.9% and standing at 2,059 euros/sq.m. at the end of the year, while resale apartments became more expensive by an average of 14.3%.
In Cluj prices also rose by an average of 15% in 2024, with the price at the end of the year standing at 3,000 euros/sq.m.; however, in Cluj the prices of older apartments rose by 16%, compared with an 11.5% increase in the prices of new apartments.
Brașov experienced an average increase in apartment prices of 19.2% in 2024, with prices of new apartments up 20.3% and prices of resale apartments up 18.4%.
Romania's presidential election will take place on 4.5.2025
After the Romanian Constitutional Court annulled the results of the presidential election held at the end of November 2024, following claims of Russian interference in the election in favor of the candidate Călin Georgescu, who came first in the first round, a new election date was set, with candidacies to be submitted by the end of March 2025. If no candidate wins a majority in the first round, a second round will be held on 18.5.2025.
Alongside Călin Georgescu, the candidate of the ruling coalition, the liberal Crin Antonescu, and the mayor of Bucharest, Nicușor Dan, are expected to run. According to initial polls that have been published, Nicușor Dan is expected to face Călin Georgescu in the second round
Cyprus
Rising real estate prices in Cyprus
According to data from the Central Bank of Cyprus, real estate prices in Cyprus (apartments and houses) rose by 2.7% in the first 3 quarters of 2024 compared with the corresponding period in 2023.
According to the index published by the Ask Wire platform, apartment prices in Cyprus rose by an average of 1.3% in 2024, while house prices fell by 0.3%.
Forget Athens: these are the best countries for real estate investment in Europe
A study by the British company 1st Move International ranked European countries as destinations for real estate investment in 2025 according to taxation of property and rental income, rental yield and price growth. Lithuania ranked first, with a rental yield of 6.77% and a 15% tax on rental income, followed by Estonia and Romania; at the bottom of the ranking are Belgium, France and Greece, where high transaction costs and a tax of more than 33% on rental income were noted. According to the report, Spain and Portugal generated the most interest in Google searches, and demand in those countries has contributed to a shortage of affordable housing and rising prices.
Source: Calcalist, Lital Samet, 11.01.25
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