Hello,
As we look back at the past year (2024) and wait for the annual summaries, 2025 has begun with a continuation of the upward price trend in some of the destinations we survey. The (relatively) high tax burden on investors in Israel, as well as the Bank of Israel's warnings about developers' sales promotions, continue to fuel demand for deals abroad and create an opportunity for Israeli developers. Destinations such as Cyprus, Greece, Portugal and Romania are popular among Israeli investors, and in recent months we are also seeing growing interest in Italy.
This month we would like to bring to your attention:
A. Investment is changing the face of Thessaloniki.
B. A summary of real estate prices in Romania in Q4/24.
C. Optimism about the Cyprus real estate market in 2025.
D. Spain is planning a 100% tax on foreigners who buy real estate there.
Wishing us all quiet and safe days, and enjoyable reading,
Adv. Ilan Leibovitch and the office team
Greece
Investment in Thessaloniki is changing the face of the city
An article on Newit.gr notes that Thessaloniki is becoming one of the most attractive investment destinations in Greece, with the real estate market at the center of this change.
The second half of 2024 was marked by rapid developments in all real estate sectors - offices, retail, logistics, housing and tourism - proving that the city is not merely following trends but creating them. From the momentum in green office buildings and the upgrading of shopping streets, to strategic investment in logistics and a tourism sector that attracts foreign investment, Thessaloniki is emerging as a pillar of growth and innovation.
According to a recent survey by Danos, of the BNP PARIBAS Real Estate group, in the office sector demand for Class A space has grown, mainly due to the completion of green buildings such as the Hub 26 complex in western Thessaloniki, which hosts major international tenants such as TaskUs and the Black Sea Trade and Development Bank. Rents in the city center range from 12 to 18 euros per sq.m., while in western Thessaloniki new buildings reach 15 euros per sq.m. The opening of the Thessaloniki metro has increased the appeal of the center and of areas with direct access to the stations, affecting demand and prices.
In the retail sector, the main commercial streets, such as Tsimiski Street, have maintained high rent levels (120-160 euros per sq.m.), while the operation of the metro has reshaped commercial activity on Egnatia, attracting investors and new businesses such as Hondos Center and Tezenis stores. Significant investments were completed with the sale of properties in the center, such as the Oysho store on Tsimiski and the Masoutis supermarket in the Plateia business center, with a combined value of 8.5 million euros.
The housing market in Thessaloniki remains on an upward trend, boosted by the “My Home II” program, which expanded the eligibility criteria and increased housing demand. At the same time, raising the Golden Visa investment threshold to 800,000 euros in Thessaloniki and other areas reduced the interest of foreign investors and slowed the rise in prices in major urban centers. Local buyers show particular interest in the eastern suburbs and in central Thessaloniki, while dozens of new homes are being built in areas such as Konstantinopolitika.
The tourism sector recorded a 5% increase in the total number of passengers at Macedonia Airport, while new hotel units such as NYX Thessaloniki and Oscar Olympic strengthened the city's tourism infrastructure. Investments in luxury hotels, such as the Electra hotel and the Mitsis hotel project in Halkidiki, anticipate continued tourism development. The renovation of the Emporikon hotel, as well as the renovation of the former Turist hotel, will further enhance the city's appeal.
Thessaloniki continues to develop dynamically, with real estate investment reshaping the city's image and offering new opportunities for investors and businesses. The opening of the metro, extensive renovations and major tourism investments place Thessaloniki in a key position for the development of the wider region.
40 million tourists visited Greece in 2024
According to data from the Bank of Greece, in 2024 there was a 9.8% increase in the number of tourists entering the country (35.95 million tourists) and a 5.4% rise in tourism revenues, which totaled more than 21 billion euros.
Over the years, a 57.4% increase was recorded in tourist arrivals from the 27 EU member states and a 40.2% increase in tourist arrivals from the rest of the world.
Romania
Rising real estate prices in Romania: Q4/24 summary
According to data from the website imobiliare.ro, in the last quarter of 2024 prices of new apartments in Bucharest rose by 23%, with the average price reaching 1850 euros/sq.m., while supply fell by 33%.
In Bucharest, increased interest was seen in areas previously regarded as “bedroom suburbs”. While deliveries (construction completions) focused on the middle ring and beyond, some developers are selling in neighborhoods such as Pallady or Berceni for 2,400 - 2,500 euros/sq.m.
With the city center closed to new construction starts, the areas immediately next to it - such as Cotroceni, Ștefan cel Mare or Politehnica - are becoming areas where select residential projects are being developed at prices that exceed even 3,000 euros/sq.m. According to Imobiliare.ro, interesting development is expected in the Nord-Otopeni area, following the completion of the new metro line.
At the national level, the upward price trend continued, with Cluj-Napoca and Brașov recording average prices above Bucharest, at 2,625 euros/sq.m. in Cluj and 2,220 euros/sq.m. in Brașov, respectively.
Cyprus
Rise in the number of short-term rental properties in Cyprus
Cyprus's Deputy Minister of Tourism, Kostas Koumis, reported to parliament that the number of properties registered as intended for short-term rental has almost doubled since April 2023, when there were 4,765 registered properties, to February 2025, when 8,248 properties were registered, with about another 2,500 properties in the registration and licensing stages. While acknowledging the economic contribution of short-term rentals, the Deputy Minister noted that the sector competes with the hotel industry, which poses regulatory challenges.
Referring to the tourism forecast for 2025, the Deputy Minister pointed to the double record in revenues and arrivals achieved in 2024, noting that 2025 is expected to be just as strong. He stressed that the main challenge is extending the tourist season.
Optimism about the Cyprus real estate market in 2025
The property market in Cyprus, despite a slowdown, continued to grow in 2024, following the remarkable success of 2023, one of the best years in the past 15, according to the Danos group's property market reviews for the second half of 2024.
Data measured by the number of contracts deposited at the land registry offices show that sales in December 2024 fell by 1% compared with December 2023. Over the whole year, property sales rose by 1% compared with 2023. Sales in Nicosia and Larnaca rose by 14% and 5%, respectively, but fell in Paphos (8%), Famagusta (5%) and Limassol (1%).
According to Danos, looking ahead, the Cyprus property market is expected to experience moderate growth over the coming years, as high interest rates will hold back local demand.
Continued foreign investment, spurred by regional geopolitical tensions and Cyprus's residency program, will remain a significant driver, the report states. “However, the market will face challenges arising from rising construction costs and regulatory changes, affecting new developments and putting upward pressure on property prices,” they added. At the same time, local buyers are finding it increasingly difficult to purchase apartments as a result of high property prices and high mortgage rates.
Cyprus continues to attract foreign investors seeking promising yields. For developers, the strong demand, especially in Limassol, Paphos and Larnaca, offers rewarding opportunities despite rising construction costs. In general, market conditions are expected to favor foreign investment and development, while local buyers will continue to face obstacles in purchasing homes.
Ranking of the best Golden Visa programs: Greece on top
The immigration and investment advisory firm Henley & Partners published its 2025 Residence Programs Index, which examined 26 residence-by-investment programs according to ten parameters, including reputation, quality of life, application processing time and investment requirements. Greece's Golden Visa program, which grants five-year residency in exchange for a 250 thousand euro investment in real estate, was ranked first, pushing out Portugal, which had topped the ranking for the previous nine years. Switzerland was ranked second, and Portugal fell to third place, alongside Italy and the United Kingdom, after changing the program's terms so that real estate investment no longer qualifies for a visa. The article also noted that Israel ranks tenth in the list of applications for a second passport, and that the countries preferred by Israelis are Portugal, Spain, Greece and Cyprus.
Source: Calcalist, 18.02.2025
Spain is planning a 100% tax on homes bought by foreigners
Spanish Prime Minister Pedro Sánchez proposed imposing a 100% tax on homes bought by foreigners who are not residents of the European Union, as part of a package of 12 reforms to address the country's housing crisis. Alongside the tax, the package also presented taxation of vacation apartments as a business activity, tax benefits for homeowners who rent at an affordable price, an increase in the supply of public housing, and the renovation of empty homes to be rented at regulated prices. According to the article, Spain already announced last year the cancellation of the Golden Visa program that had operated since 2013, and its house price index rose to 162.5 points in the third quarter of 2024, compared with 133.6 points in the corresponding quarter of 2021. The housing shortage and rising prices have led to public protest, mainly in tourist areas such as the Canary Islands, Barcelona and Alicante.
Source: Calcalist, 18.02.2025
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