Hello,
Apartment prices keep rising not only in Israel but in all the countries where our office operates. At the same time, against the backdrop of the trade war launched by the US president at the beginning of April and the turmoil on global stock exchanges, the real estate industry around the world is dealing with a sense of confusion and uncertainty. On the one hand, there are expectations that investors will shift their capital from the capital market to the real estate market. However, it is clear that the business environment is becoming more complex and risky.
About 7% of the raw materials used in residential construction in the US are imported. The imposition of new tariffs on imported building materials, such as the “Liberation Day” tariffs imposed by President Trump, is expected to raise construction costs in the US. According to estimates by real estate professionals, these tariffs may raise the cost of building new homes.
Here in Israel, the construction input cost index, which already jumped by 2.6% in January 2025, is reaching an annual pace of about 6%, even before the impact of the tariff program and the expected rise in the price of raw materials for construction. The index is expected to keep rising and to affect apartment prices, especially those bought “off plan” whose occupancy date is far off, as buyers will have to pay for the rise in the construction input cost index.
This month we would like to bring to your attention:
A. Apartment prices in Athens and its surroundings continue to gallop.
B. The International Monetary Fund: the Greek economy has the best performance in the European Union.
C. A VAT increase is expected this month in Romania.
D. A new bill will strengthen the protection of apartment buyers in Romania.
E. Apartment prices in Bulgaria have surged over the past decade.
F. Cyprus's economy continued to grow in Q1/2025.
New! In our newsletter:
Starting this month, our newsletter will include a new and exciting section! In every issue, we will share our media publications, including opinion pieces, personal interviews, reviews and fresh insights.
Enjoyable reading,
Adv. Ilan Leibovitch and the office team
Greece
Apartment prices in Athens and its surroundings continue to gallop
The housing market in Athens in 2025 generally portrays a new reality, of a city moving in two parallel worlds. On one side, the glamour of the luxury coastal zone and expensive urban neighborhoods; on the other, the cheaper but at the same time neglected neighborhoods, where the cost of living and daily life are dramatically different.
In the most expensive areas of Athens, the numbers speak for themselves: in Vouliagmeni the average asking price jumps to 7,273 euros/sq.m. Among international investments, large development projects and far-reaching regeneration plans, Vouliagmeni is becoming a benchmark for luxury living, compared with cosmopolitan destinations such as the French Riviera or Miami.
Voula follows with 6,034 euros/sq.m., continuing its rise as a luxury suburb, while Glyfada and Elliniko - two areas that have dramatically changed their profile thanks to the development of the large Elliniko project - record prices above 5,300 euros/sq.m. Even in the traditional center of Athens, Kolonaki and Lycabettus, prices continue to rise, with 5,000 euros/sq.m. being the new “threshold” for living in the historic center.
This is an Athens now aimed at an audience with high purchasing power, such as foreign investors, Golden Visa buyers and wealthy Greeks. Demand focuses on luxury properties, with features such as sea views and direct access to shopping centers and marinas, but also proximity to infrastructure projects that promise to change the face of the wider area.
However, if we look beyond the display windows of the expensive suburbs, we see another Athens, that of the cheaper neighborhoods, where properties remain more affordable but with clear contrasts. In Agia Varvara, the cheapest area in Athens, the average price is 1,260 euros/sq.m. That is a difference of almost six times less than in Vouliagmeni, in the same metropolitan area.
They are followed by Varnavas, Acharnes, Patisia and Patision - Acharnon, with prices ranging from 1,400 to 1,600 euros/sq.m. These are areas outside the official map of large investment plans, where daily life is characterized by a lack of infrastructure, traffic congestion and fewer opportunities to upgrade the urban landscape.
The wide gap between cheap and expensive areas raises new concerns. On one hand, affordable areas are becoming a magnet for young buyers who do not have much initial capital or for those seeking low-risk investments. On the other hand, the low price is often linked to a lower quality of life, lower resale value and more urban challenges.
At the same time, the residential real estate market in Athens is at a critical crossroads. Specifically, will it continue to move toward a logic in which real estate becomes a privilege for the few? Or will it manage to develop more balanced residential areas, able to attract a wider variety of residents and investors?
The answer will be determined in the coming years, as new infrastructure projects, regeneration and general economic conditions shape the new urban landscape. For now, the image of Athens in 2025 remains a mosaic of contrasts.
International Monetary Fund: the Greek economy has the best performance in the European Union
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, spoke about the impressive course of the Greek economy and the significant progress made in recent years, immediately after the meeting she held with the Greek Minister of Economy at the organization's headquarters in Washington.
“Greece has made impressive progress in recent years. It is one of the best-performing economies in the European Union. What we see in Greece is what we would like to see everywhere,” said the IMF Managing Director, adding that “growth is higher than the EU average.” “From the deficits of previous years, we now have a surplus, and most importantly, the country is advancing with structural reforms that make it more competitive in a world with more frequent shocks. This means a resilient economy for the Greek people,” she stressed.
Finally, Georgieva made a very important remark - as she described it: “Everyone is talking about the power of digital transformation. Greece is harnessing this power to deliver efficient public services, to be able to reach citizens and offer them what they expect at low cost, with transparency and without any room for corruption.”
Minister of Economy Pierrakakis, who, as he said, represents a proud country, spoke about the new reality of the Greek economy, which, as he stressed, stems from hard work, reforms and responsibility. “We are at IMF headquarters together with the Managing Director, Ms. Georgieva, fifteen years after the start of an unprecedented adventure for the Greeks. The country has now overcome a gray decade and returned to positive growth rates and to an outward orientation. Through hard work, responsibility and reforms, we came out of the margins and managed to create trust, to win the trust of investors and markets,” the minister stressed.
“IMF officials now speak about Greece in flattering words; a few years ago the words were not the same. Here I am representing a proud country, representing its citizens who succeeded. I think it is very important that we can now look to the future far more optimistically than in the past. Of course, we still have many steps to take, citizens who need to be supported, opportunities to be seized, structures to be modernized. We now have every reason to believe that we will succeed,” Pierrakakis concluded.
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. The improvements in the Greek economy create significant opportunities for investors and real estate developers. This may increase investor confidence in the real estate market, make it easier to raise capital for real estate projects, and could lead to an increase in demand for properties, both residential and commercial.
Our media coverage
“The real opportunities are often far from the familiar beaches that photograph well.”
“The most important thing for an investor in Georgia is what he receives as security when he buys an apartment from a developer.”
“Even in times of uncertainty, the country continues to attract tourists and investors alike.”
“There is a trend, especially in Europe, of apartment buyers who are willing to pay more for a green home.”
Romania
A VAT increase is expected this month
VAT is rising to 21%, along with other taxes. These changes are expected during May (the expectation is that this will happen between the two expected rounds of the presidential election on 4.5 and 18.5). Since November 2024, economic commentators have argued that tax increases are unavoidable and, moreover, that they were taken into account by the government at the time (the government headed by Ciolacu in a coalition that included the PSD and PNL parties) as a commitment to the European Commission and the International Monetary Fund.
Disappointing budget execution data for the first quarter, with a deficit of 2.3% of GDP, may lead to such an announcement sooner rather than later.
Sales of housing units in Bucharest and Ilfov fell by 4.3% compared with Q1/2024
More than 13,200 houses and apartments were sold in Bucharest and its surroundings in the first 3 months of the year, a decrease of 4.3% compared with the corresponding period in 2024, according to an analysis by the real estate consulting company SVN Romania based on statistical data from the National Agency for Cadastre and Land Registration (ANCPI).
More than 11,200 homes were sold in Bucharest in the first quarter of 2025, a decrease of 5.4% compared with the corresponding period in 2024, while in Ilfov County 1,960 homes were sold, an increase of 2.4% compared with the level of the first quarter of 2024.
“The decrease in supply, combined with demand that remained high, led to even greater pressure on transaction prices. However, it seems that potential buyers have already adapted to the new prices, and the ability to buy a home still remains at a good level,” said Andrei Sârbu, CEO of SVN Romania.
Almost 18,000 new apartments will be completed in 2025 in Bucharest and its surroundings, according to SVN data, a level as low as that recorded in 2024, when the lowest number of homes in the past 5 years was delivered in the Bucharest area.
Almost 37,000 homes were sold in Romania in the first 3 months of the year, a decrease of 4.9% year over year. Most housing units were sold in Constanta, Cluj and Timis, according to the official statistics.
A new bill will strengthen the protection of apartment buyers
Following the collapse of the Nordis company, the Romanian Senate voted on a bill protecting the customers of real estate developers who sell apartments in buildings still at the construction stage of the project; however, the law will take effect only after it is also approved by the Romanian Chamber of Deputies, the decision-making body. Developers will be able to claim the balance of the money as the work progresses.
The first change the law brings is that developers will be able to commit to selling apartments only after they meet several important conditions: the building permit must be registered in the land registry (tabu), a preliminary registration must be made for apartments in future buildings, and a separate land registry file must be opened for each apartment.
It will also be possible to sign a “reservation” (a purchase offer) for an apartment that is still under construction, valid for 60 days. Essentially, this is a form through which the buyer can secure the apartment they want before signing the formal documents. For this reservation, an advance payment of up to 5% of the apartment's total price will be paid, an amount that will be returned to the buyer if, within 60 days, a preliminary sale-purchase agreement or the final contract is not signed.
At the same time, the law also sets a clear limit on the advance payments the developer may request, in the following stages:
- a maximum of 15% upon signing the purchase agreement,
- up to 25% if the structural frame of the building is ready,
- and another 25% if the infrastructure works (electricity, water and gas) are completed.
Another important detail: all of this money will be deposited in a bank account opened in the developer's name, and it can be used only for work related to the specific project.
If the developer becomes insolvent, the buyers - together with the state - will receive the status of “privileged creditors” in the proceedings. This means they will have a higher level of protection and a better chance of getting their money back.
From the writer's desk:
The new bill will be a significant step in protecting apartment buyers from developers, and may open up the market, since Romanians are afraid to buy apartments “off plan” and developers begin their sales efforts mainly once they have a show apartment. The law is in many respects reminiscent of the Israeli Sale Law (Apartments) with regard to securing the buyer's funds, although it is not refined to the point of providing buyers with guarantees for the funds that will be paid to developers/contractors.
Political shock in Romania
After the results of the first-round election were annulled about half a year ago, something dramatic is happening here, and it will directly affect your investments.
On Sunday 4.5.25, the results of the presidential election upended the board. Instead of the candidates we had grown used to, the far-right candidate, George Simion, took no less than 41% of the votes! He is now on his way to a second round against the mayor of Bucharest, Nicușor Dan, on 18 May. The candidate backed by the ruling coalition parties, who according to all the polls was supposed to come second, Crin Antonescu, came in only third and will not run in the second round of the election.
But it did not end there. On Monday, 5.5.25, with the publication of the election results, Romanian Prime Minister Marcel Ciolacu took responsibility for the failure of the coalition's candidate and resigned.
From the writer's desk:
So what does this mean for you as real estate investors?
A big question mark: A Simion victory could create an atmosphere of uncertainty in the market. When the political map changes in this way, it can affect the appetite of foreign investors and more generally.
Policy in the making: Simion's positions on the European Union and international relations may lead to changes in government policy, and this could directly affect regulations, taxation and future real estate projects.
Impact on our partners: Romania is part of the European Union, and the president can influence important decision-making. Any change in this direction could affect economic cooperation and Romania's attractiveness for foreign investment.
Bulgaria
Housing prices in Bulgaria have surged over the past decade
Over the past decade, residential property prices in Sofia, Bulgaria, have surged by 200%, from an average of 715 euros/sq.m. in 2015 to more than 2,100 euros/sq.m. at the beginning of 2025. These figures are based on transactions of the real estate company Imoteka, which marked ten years in the market.
The method for determining property prices has also evolved significantly. The average price per square meter has become a more detailed index, now largely influenced by factors such as property quality, building standards, location, transport links, local infrastructure, social environment, greenery and the area's future development and investment potential. As a result, prices of similarly sized homes in different neighborhoods can vary by tens of thousands of euros.
In Varna, housing prices have risen by about 120% since 2015, from less than 700 euros/sq.m. to more than 1,500 euros/sq.m. In Plovdiv, the growth is about 150%, with average prices climbing from 550 euros/sq.m. to almost 1,400 euros/sq.m. over the same period. The upward trend in transactions is seen mainly in big cities. While nationwide transaction volumes have remained relatively stable, activity in Sofia has doubled in ten years. In Varna it has grown by 45-50%, and in Plovdiv by about 15%.
The average size of homes purchased has also grown, from 84 sq.m. in 2015 to 96 sq.m. at the beginning of 2025. This is attributed both to post-pandemic preferences for more spacious homes and to a general improvement in households' financial capacity. The average monthly wage in Bulgaria rose from slightly more than 850 BGN in 2015 to more than 2,400 BGN at the beginning of 2025. In Sofia, incomes are even higher, in line with the city's dominant share of real estate activity.
The real estate landscape in Sofia has changed markedly, with buyers increasingly shifting their interest from old, prestigious neighborhoods to areas recently developed with modern complexes. The primary market for new construction has overtaken the secondary market in terms of activity. Many prefer to live in a new, modern environment, and Sofia's evolving look reflects this preference. At the same time, they stress the need for the state and municipal authorities to ensure adequate infrastructure in new neighborhoods in order to maintain a high quality of life, while preserving the appeal of the city's historic center.
Similar dynamics are seen in Varna and Plovdiv, where interest focuses on areas with a significant supply of new quality housing projects, including houses. Following the pandemic, the house market has expanded as people prioritize sustainable living environments and the flexibility of remote work. This trend has spurred both customer demand and a noticeable rise in the construction of detached houses and gated residential communities.
The rental market has also experienced significant growth, with prices rising by about 111% over the past ten years. However, the pace was slower than that of property purchases, as more people choose to buy rather than rent, driven by low interest rates, higher incomes and inflation. It is worth noting that even young buyers under the age of 30 increasingly choose to pay mortgage payments similar to or lower than the rent, driven by the deep cultural value attached to home ownership in Bulgaria.
Since the beginning of 2025, the real estate market in Bulgaria has seen a marked increase, with housing prices rising by about 6%. This growth comes against the backdrop of heightened expectations surrounding the country's planned accession to the eurozone.
It is important to note, however, that over the past decade more than 70% of real estate transactions in Bulgaria were carried out in cash, a trend linked to the significant informal economy.
Cyprus
Cyprus's economy continued to grow in Q1/2025
The Cypriot economy continued its positive course in the first quarter of 2025, according to the Cyprus Composite Leading Economic Index (CCLEI) compiled by the Economics Research Centre of the University of Cyprus (CypERC), although signs of a slowdown are emerging against the backdrop of growing international uncertainty.
The CCLEI rose by 1.7% year over year in March, after stronger increases of 2.3% in February and 2.4% in January, based on revised data. Despite the continuing upward trend, the data point to a gradual slowdown in the pace of economic growth.
The positive performance of the CCLEI, CypERC notes in its bulletin, was “strengthened by improvements in key domestic and international indicators”. Notable contributions included an increase in property sale contracts, an increase in the values of Cypriot credit card transactions and an increase in retail sales volumes. A decline in the price of Brent crude oil also supported economic momentum by reducing costs for businesses and consumers.
However, a decline in consumer confidence both in Cyprus and across the eurozone had a negative effect on the index. In addition, a decline in electricity production volumes and a decrease in tourist arrivals further limited the index's growth, and highlighted vulnerabilities in certain sectors.
“The recent trend of the CCLEI index remains upward, but it is slowing,” said the CypERC research team. They pointed to the continuing international economic uncertainty as a key factor affecting Cyprus's current and future growth prospects.
Cheap financing, “flips” and the World Cup: how Porto became a hot destination for real estate investment
The article examines the interest of Israeli investors in the housing market in Porto, the second-largest city in Portugal. According to the article, Portugal's GDP grew in 2024 by 1.9%, double the continental average, the average wage rose by about 12.5% within two years to about 1,600 euros per month, and there is no restriction in the country on foreigners taking out mortgages, with the average mortgage interest rate standing at about 3%. The article also details the taxes that apply to buyers and property owners, including a purchase tax of 4%-6% and higher, stamp duty of 0.8%, capital gains tax (mas shevach) of 14% which Israelis are required to top up to 25% under the tax treaty, and a 25% tax on rental income, as well as a gross rental yield of 5%-6%. A Portuguese lawyer notes in the article that ownership of an apartment cannot be registered before its construction is completed, and therefore the status of an “off plan” buyer is weaker than in Israel.
Source: Merkaz HaNadlan, Nimrod Boso, 17.04.2025
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