Hello,
Very soon we will all sit down at the Seder table, and I would like to remind us all that 59 hostages will not celebrate the Seder with their families for the second year running, but will instead be in Hamas's tunnels in Gaza. May they return to their families soon.
As for real estate, the central question for those active in international real estate is whether the Bank of Israel's measures to cool developers' sales promotions, which took effect at the beginning of the month, will affect buyers and continue the trend of purchases and investments abroad.
This month we would like to bring to your attention:
A. The upgrade of Greece's credit rating.
B. The increase in Greece's minimum wage.
C. The downgrade of Romania's credit outlook.
D. A report: the main challenges facing real estate developers in Romania - labor and construction costs.
E. Apartment prices in Bulgaria's big cities have surged since the beginning of 2025.
F. Real estate professionals predict that the Cyprus property market is on the verge of a “golden” era.
Wishing you a happy and kosher holiday, and enjoyable reading,
Adv. Ilan Leibovitch and the office team
Greece
Increase in the minimum wage
Greek Prime Minister Kyriakos Mitsotakis announced an increase in the minimum wage from 1.4.25 by 50 euros (from 830 euros gross to 880 euros). This means a net monthly increase of 34 euros for employees without children and without other income, and 43 euros for employees with 2 or more children and no other income, after payment of social security contributions and income tax.
The Greek prime minister reiterated that his goal is to raise the minimum wage to 950 euros gross by the end of his second term, in 2027.
Upgrade of Greece's credit rating
The global rating agency Moody's raised Greece's rating to “Baa3” from “Ba1”, noting a faster-than-expected improvement and the country's greater resilience to potential future shocks.
“Based on the government's policy stance, institutional improvements that are bearing fruit and a stable political environment, we expect Greece to continue running significant primary surpluses, which will steadily reduce its high debt burden,” the agency said in its statement.
Since 2020, the country's debt - the highest in the eurozone - has been reduced the most, reaching 154% of its gross domestic product in 2024, and it is expected to fall even further by the end of the current year.
Greek banks are stabilizing and returning to profit after being nationalized following the 2009 financial collapse caused by the country's debt crisis, which left them in a vulnerable position and required several capital injections from the government.
Morningstar DBRS also raised Greece's credit rating to “BBB” from “BBB (low)”, two notches above investment grade, citing a healthier banking sector and the continued decline in the country's government debt ratio. The agency also revised Greece's outlook to “stable” from “positive”, reflecting a balance between ongoing credit challenges that are slow to improve and the country's institutional stability, which supports positive prospects.
From the writer's desk:
The upgrade by Moody's, the first since the 2010 crisis, confirms the significant improvement in Greece's economy and the country's political stability.
Hotels are the top real estate investment
Hotels are the top real estate investment among foreign investors.
In recent years, investor interest in hotels has been growing, as both the stable economic environment and the rising tourism trend work positively in this direction.
In total, the number of hotels in Greece, according to data from the Hellenic Chamber of Hotels, has exceeded 10,000 from 2020 to date, while in 2024 there was a 5.4% increase in 5-star hotels compared with 2023 and 2.8% in 4-star hotels, respectively.
As Lefteris Sikalidis, CEO of a real estate consulting company and chairman of the real estate and development committee of the Hellenic-American Chamber of Commerce, noted to the Athens News Agency, there is interest in the market in ready, operating projects, and in properties that can be converted into hotels, whether located within the urban fabric or elsewhere in Greece, and whether or not they are also on the coast. There is also interest in developing hotels from scratch, assuming that the plans, the relevant permits and the business plan are already in place.
“We believe the rise in investment interest is linked to the general economic stability that exists, and especially after Covid, the economy's macroeconomic data look stable and attractive and create a favorable economic environment. More and more companies are expressing interest in investing. In hotels, most of the time one person is the owner and another is the operator. So there is interest from both investors and operators, and this shows an increase of around 20% compared with the 2023 trend,” Mr. Sikalidis noted.
According to Sikalidis, in addition to the known areas of interest (Crete, Santorini, Paros and others), investors have begun to show interest in less familiar areas as well, such as islands with a special character, the Peloponnese and other parts of mainland Greece, mainly in coastal areas, and this also applies to northern Greece.
“However, we must stress that the choice to buy is made in a very selective and careful manner, since they buy properties that they know will deliver results. 4-star hotels are in greater demand, with interest also in resorts, city hotels and business hotels. City hotels concern mainly Athens and Thessaloniki,” Mr. Sikalidis emphasized.
He also stresses that, according to the latest property market forecast of the Hellenic-American Chamber of Commerce, “hotels have the highest demand of all properties and Greece seems to be becoming a ‘hospitality destination’. However, in terms of hotel operation, what we lack and need is more quality, that is, better services, accessibility, better services and an overall experience, because ‘Greece has a positive development as a new destination’,” Mr. Sikalidis emphasized.
Antonis Markopoulos, CEO of a digital property management platform, also spoke about the strong investment interest that exists mainly in properties with more than 50 beds, stressing that this interest is now moving to other destinations (beyond Mykonos, the Cycladic islands in general, etc.) such as Crete, because it has the longest tourist season, but also to the hinterland, and mainly to the Messinia, Mystras and Mani areas, where there is high demand from visitors and a fairly long tourist season.
“The islands remain the main destination of investor interest, but now on certain islands such as Mykonos, Santorini, Rhodes and Corfu, the demand is for even larger tourist accommodation. In general, investment interest concerns large hotels, from large investment funds (some from London and Germany) but also from family offices.”
“Their priority is to buy a hotel and upgrade it. A classic example is the Omonia area in Athens, where big brands bought old hotels and upgraded them,” Mr. Markopoulos emphasized.
Athens is a destination with great potential, where, according to the president of the Athens Hotel Association, Evgenios Vassilikos, there has been a lot of interest from foreign brands over the past three years.
“This is positive, because it involves more franchise agreements, but there are also purchases and sales. Of course, all of this comes with a ‘but’, as in the case of a new economic crisis.”
Romania
Presidential candidate Călin Georgescu disqualified and will not be able to run in the repeat election
The far-right populist Călin Georgescu, who came first in the first round of the presidential election held at the end of 2024, cannot run in Romania's presidential election in May after the Constitutional Court (CCR) on Tuesday, 11 March, rejected the appeal he filed against the Central Electoral Bureau's (BEC) decision to disqualify his candidacy. The ruling of the highest court is final and binding.
Georgescu, the pro-Russian politician (who, in the election round held at the end of 2024, was alleged to have even received assistance from Russia), submitted his candidacy for the repeat election on Friday, 7 March. However, two days later, on Sunday evening, the Central Electoral Bureau rejected his candidacy, which led to violent demonstrations in central Bucharest.
In a statement explaining its decision, the electoral bureau stressed that presidential candidates must “respect the constitution and defend democracy”, criteria that Călin Georgescu does not meet. The bureau also noted that the Constitutional Court had previously annulled an election because of Georgescu, which made his candidacy automatically invalid.
The press secretary of Russian President Vladimir Putin, Dmitry Peskov, said that any presidential election in Romania held without the participation of Călin Georgescu is “illegitimate”, Politico Europe reported. “This is a violation of all democratic norms in Central Europe,” he stated.
By contrast, the Constitutional Court (CCR) rejected the claims against the candidacy of Bucharest mayor Nicușor Dan in Romania's presidential election, including after it was claimed against him that he had lied when he stated in the past that he had not cooperated with the Securitate of the former communist era.
With the closing of the candidate lists on 15 March, the picture became clearer, with the three main candidates being: Crin Antonescu, the representative of the coalition parties; George Simion, president of the far-right AUR party; and Bucharest mayor Nicușor Dan, who is running as an independent candidate and who is leading in the polls at this stage.
The repeat presidential election will take place on 4 May (first round) and 18 May (second round).
According to a Deloitte report, labor and construction costs are the main challenges for real estate developers in Central Europe, including Romania
Deloitte has been conducting the Real Estate Confidence Survey for Central Europe since 2019 to find out how professionals in the field perceive the market. Three groups of stakeholders take part in the study - developers, investors and market advisors. In the 2025 edition, most respondents came from the Czech Republic (32%), Romania (19%), Poland (13%) and Hungary (4%), while 32% operate in Central European markets.
Almost 60% of the participants in the survey conducted by the consulting firm Deloitte expect the total value of transactions to rise in 2025. The level of optimism ranges from 64% in the Czech Republic to 24% in Romania.
The study emphasizes that the Central European real estate sector demonstrates resilience and adaptability in the face of global uncertainty, geopolitical tensions and economic volatility.
According to the report, labor costs and the availability of construction labor are becoming the main concern of real estate developers in Central Europe in 2025 (26%), the dominant issue in recent years, followed by construction costs (20%) and the acquisition of land for future development (18%), according to the Deloitte Real Estate Confidence Survey 2025 for Central Europe, conducted in several countries. On the other hand, almost 60% of the study's participants expect an increase in the value of real estate transactions in the near term, with the level of optimism ranging from 64% in the Czech Republic to 24% in Romania.
More than 50% of the participants expect market activity to improve this year, compared with 40% a year ago, while the share predicting a decline fell to 14%, from 16% in 2024. However, while in countries such as Poland and the Czech Republic the perception matches the regional average, in Romania only 41% expect growth, and a decline in market activity is expected.
The perception of the economic climate has also improved in the region over the past year - 36% of the participants expect a positive development (compared with 29% a year ago) and only 19% foresee deterioration. Romania also stands out in this respect, with 57% of the participants assessing a worsening of the economic climate and only 14% a positive development.
The fiscal framework will remain stable in the near future in the region, according to 71% of the participants, while most of the participants in Romania (70%) expect an increase in the tax burden.
In terms of the sectors seen as the most dynamic over the next five years, green energy infrastructure leads in the region (67%), and also in the main countries participating in the study - Romania (78%), the Czech Republic (75%) and Poland (68%), followed by data centers (55%) and healthcare (36%).
“The study results point to the evolution of the market, and despite the current challenges, the players are adapting to the new reality and prioritizing the areas with significant growth potential in the coming years - beyond green, technology and healthcare. Romania's distinctiveness is actually tied to the overall economic developments and to the prospects of correcting the macroeconomic imbalance. Romania expects an increase (58%), above the regional average (54%). Romania also presents challenges in terms of the expected changes in real estate legislation - the new Code of urban land planning and construction comes with many changes and complex secondary legislation that requires preparation, implementation and adaptation time from the market players,” said Irina Dimitriu, head of the legal and real estate practice at Deloitte Romania.
A notable addition to the study this year is the inclusion of ESG (environmental, social and governance) requirements as a distinct challenge for real estate companies (12%). And while the real estate market is still in the process of adapting to these requirements, most participants expect ESG-compliant properties to be up to 15% more expensive than those that do not meet the requirements in the coming period.
Moody's and the rating agencies on Romania's credit rating
The international rating agency Moody's followed Fitch and S&P in changing Romania's outlook from stable to negative, based on concerns about the fiscal situation, which worsened following the political turmoil. All three major agencies rate Romania's debt in the lowest category of the investment-grade range - Baa3 in Moody's case.
The decision to change the outlook to negative reflects the risk that, in the absence of further fiscal consolidation measures, Romania's fiscal strength will weaken significantly in the coming years, the rating agency explained. Moody's expects Romania's debt-to-GDP ratio to exceed the 60% threshold during 2026.
If the government's debt burden and debt affordability indicators weaken less than Moody's current expectations, the rating agency says it is likely to return Romania's outlook to stable. However, this would most likely require the adoption of additional fiscal consolidation measures and improved spending discipline and management of overall fiscal policy.
Romanian Finance Minister Tanczos Barna said there is no need for additional consolidation measures in order to meet this year's deficit target of 7.0% of GDP. However, the statement must be placed in its electoral context, as the country is facing a presidential election in May.
The European Commission gave the green light to Romania's fiscal consolidation plan last November, stating that it expects Romania to draft and legislate specific tax reforms by 1 April. Measures taken ad hoc at the end of 2024 are generally seen as insufficient.
Moody's expects that additional, postponed fiscal consolidation measures, which are unlikely to be announced before the presidential election, will bring a moderate fiscal tightening to a public deficit of 7.7% of GDP in 2025 - still almost 1.0 percentage points lower than in 2024.
Together with a significant downward revision of Moody's growth forecasts for Romania, the wide public deficit will still cause the government debt burden to rise quickly to 59.3% of GDP at the end of 2025 and 62.7% at the end of 2026, from 48.9% at the end of 2023.
Bulgaria
Housing prices are surging in Bulgaria's big cities
The real estate market in Bulgaria continues to show strong growth, with housing prices in the big cities rising in early 2025. According to data from the Zimoti.com website, both housing demand and favorable mortgage terms are contributing to the rise in property prices, particularly in Sofia, Plovdiv and Burgas.
In the first two months of 2025, property prices in these cities rose between 8% and 15% on an annual basis. This increase is driven mainly by a limited supply of new homes, increased demand, mainly from young families and investors, and low mortgage interest rates. Migration trends toward larger cities also play a role in the rise in prices.
The average price per sq.m. at the beginning of 2025 is as follows: Sofia 1980 euros, Plovdiv 1150 euros, Varna 1550 euros and Burgas 1200 euros. As the purchase market strengthens, rents are also rising, with rents for two-bedroom apartments rising faster than the wages of many Bulgarians. In Sofia the average rent for a two-bedroom apartment is 680 euros per month, while in Plovdiv and Burgas it stands at 450 euros and in Varna 520 euros.
Several key factors contribute to this upward trend in housing costs. Inflation and rising construction expenses have pushed up the prices of building materials and labor, and put additional pressure on property prices. Meanwhile, the relatively low interest rates on mortgage loans continue to encourage property purchases. Furthermore, there is a shortage of newly built homes, especially in desirable urban areas, which has pushed up prices in the real estate market.
Another significant factor driving the market is the growing interest in real estate as a form of investment. As a result, both property prices and rents in Sofia, Plovdiv and Burgas are expected to keep rising in the coming months, making the housing market more expensive for both buyers and tenants.
Cyprus
The Cypriot property market is on the verge of a “golden” era
The 19th Development and Construction Conference and Exhibition, held last month, included a round-table discussion titled “Cyprus Real Estate 2025 - How are values changing and what are the expectations for the future?”, with the participation of industry professionals who foresee a continued positive trajectory and further growth in real estate, and who describe the Cypriot real estate market as resilient and on the verge of a “golden age”.
The discussion focused on the resilience of the market, analyzing the key factors affecting demand in Cyprus's real estate sector. The participants examined investment trends, the evolving needs of international investors and of companies relocating to Cyprus, and strategies for adapting to economic changes while ensuring sustainable growth.
Kikis Athinodorou, director of Kikis Athinodorou & Associates LLC, said that the market is at a stable level, demonstrating significant stability.
Markos Christodoulou, CEO of IKIA RESIDENCE, pointed to the presence of major development projects but stressed the need for caution among all stakeholders to avoid potential problems, particularly regarding permanent residence permits. He noted that investment applications related to the permanent residency program surged between 2012 and 2015, but have since been rejected, with growing negative reactions on the issue.
“Political forces must address this collectively,” he stressed, adding that Cyprus has the flexibility to make quick decisions, which increases its appeal in attracting foreign companies.
Georgios Chrysochos, director of Cyfield Group, analyzed the demand for real estate, distinguishing between local and foreign buyers. For locals, economic stability and interest rates play a decisive role, and both are now at good levels. For foreign investors, demand remains stable. Regarding availability and labor, he noted that supply has not grown enough to meet demand, and predicted that the upward trajectory of the real estate market will continue.
“It is not all black and white; many contracts have been canceled due to contractor failures,” Chrysochos stated.
Petros Lazarou, CEO of G&P Lazarou Agents Ltd, predicted a “golden age” for the real estate market, stressing that Cyprus is emerging as an energy hub. With the European Union's shift away from Russian natural gas supply, maritime areas are gaining strategic importance. At the same time, he stressed that Cyprus has overcome challenging periods, with development companies adapting to changes in the market.
Panikos Livadhiotis, CEO of L. Livadhiotis & Sons Developers Property Developers, stated that real estate trends in Larnaca are positive. “Both the developers and the customers continue without relying on financing, which is a sustainable and healthy approach for both sides,” he noted. He also stressed the importance of adopting modern tools, such as artificial intelligence, to improve communication and achieve better results.
Pantelis Leptos, co-president of the Leptos Group of Companies, stated that the pandemic accelerated the globalization of the real estate market, leading to similar property prices in different countries. He also stressed that remote work has reshaped professional needs, making Cyprus an attractive destination for digital nomads and remote workers. Regarding GDP growth, he estimated that Cyprus, currently at 35 billion euros, could reach 50 billion euros - provided that the country focuses on sustainable development, improved global connectivity, a resilient banking system, reduced bureaucracy, talent attraction and digital transformation.
The Netherlands tried to put order into the rental market. Did they succeed?
In May 2022 the Dutch government and several municipalities decided to tighten oversight of the rental market: short-term rentals were banned almost entirely, the share of apartments under price control was expanded to almost 90% of the market, and open-ended contracts became the norm; most of the law took effect in July 2024. According to the article, the measures did not halt the rise: the Dutch central bank estimates that rents will rise by 7.7% in 2025, apartment owners prefer to sell or leave apartments empty, and the middle class is being pushed out of the market. The article points to a supply shortage as the central problem, with public housing alone short by about 400 thousand apartments and an average waiting time of seven years. It also notes that the number of short-term rental listings for foreigners and students, which are not subject to oversight, jumped by about 50% after the law came into force.
Source: Globes, Asaf Oni, 21.03.2025
Founder of the real estate company Vision & Beyond arrested in the US on bank fraud charges
Stas Greenberg, founder of the Israeli real estate company Vision & Beyond, was arrested in Houston under a warrant from the US District Court for the Southern District of Ohio, on suspicion of bank fraud and false statements in loan applications. The company, founded in 2018, served Israeli investors who bought properties in the US, mainly in Ohio and Houston, and in lawsuits filed against it, it was alleged that its founders forged documents and took out double financing on properties. According to the article, the two founders disappeared at the beginning of 2024, the company was liquidated in Israel at the request of employees who had not been paid, and a large share of the apartment owners discovered that the properties were not registered in their names or had been pledged without their knowledge. The second founder, Peter Gizontermann, is in Israel and was not arrested.
Source: Calcalist, Almog Ezer, 24.03.2025
Hagag Europe signed an agreement to lease the retail space in a historic building in Bucharest
Hagag Europe reported that it signed an agreement to lease all the retail space in the “Palace” complex on Calea Victoriei in Bucharest to a tenant operating in the field of international fashion brands, which will establish a retail complex on the site. The complex, with an area of about 4,550 sq.m., includes a preserved building that served the Romanian government in the early 20th century, and was also used by the royal family and by the Ceausescu regime. According to the article, the building was damaged in bombings during World War II, was restored, and was declared a historic monument in 2004.
Source: ynet, Hila Zion, 04.03.2025
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