Hello,
The elections held last month in Romania and Portugal, as well as the elections held at the beginning of this month in Poland, may create new opportunities for real estate investors and developers operating abroad.
This month we would like to bring to your attention:
A. The Bank of Greece forecasts continued growth in 2025.
B. Greece ranks among the top 5 countries in the EU for luxury hotel investment.
C. Hagag is building a new hotel in Bucharest.
D. The mayor of Bucharest was elected president of Romania.
E. The Central Bank of Cyprus - a slowdown in the rise of apartment prices.
F. The elections in Portugal ended without a decisive result for the 3rd time.
Enjoyable reading,
Adv. Ilan Leibovitch and the office team
Greece
The Bank of Greece forecasts continued growth in 2025
According to the Bank of Greece forecasts published on 30.05.2025, the Greek economy appears set to maintain its growth momentum in 2025.
The country's GDP is expected to grow by 2.3%, above the eurozone average. The main drivers of this growth will be private consumption and investment, which are receiving a significant boost from European funds, reflecting efforts to upgrade activity in the Greek economy.
The report also forecasts a decline in inflation, with the harmonized consumer price index falling to 2.6% in April 2025, compared with 3.1% in March. This decline stems mainly from lower energy and processed food prices, factors that had raised the cost of living in previous months.
In the labor market, employment rose slightly by 0.1% year over year, while the unemployment rate fell to 8.3%, the lowest in recent years. This reflects the positive effects of the economic recovery and of investment in the domestic market.
However, the picture is not free of challenges. The current account deficit widened in the first quarter of 2025, as a result of a deterioration in the goods and services balance. External imbalance is a reminder of the need to strengthen the competitiveness of the Greek economy.
The Bank of Greece report highlights climate change and growing uncertainty in global trade policy as key risks. These factors may limit the country's growth momentum, and underline the need for cautious fiscal policy and for continued reforms.
The Greek economy, despite the challenges, continues to grow at a positive pace. 2025 is expected to be a year with strong prospects, provided that the external risks are successfully addressed and the reform momentum is maintained.
A new real estate policy will be implemented by the Greek government
Deputy Prime Minister Kostis Hatzidakis and Minister Kyriakos Pierrakakis announced a new strategy aimed at supporting the government's housing policy and strengthening the housing supply.
According to the Deputy Prime Minister, the scale of the housing crisis requires new measures, and therefore the following actions are under way:
- The option of making available for sale on the market that part of the housing stock that does not concern public housing - so that the investment can be recovered more quickly.
- The option of renovating existing buildings, in addition to constructing new buildings on empty lots.
- Establishing a central public housing management body and an electronic registry of projects - in order to improve transparency and the efficient matching of needs.
Improving the regulatory framework through the preparation of local and special urban plans, and in addition coordinating the responsible ministries together through three actions:
- Establishing a permanent inter-ministerial housing committee, with the participation of all relevant ministries.
- Creating a special digital platform where citizens will have the opportunity to learn about all the affordable housing policies and easily find any program that suits their profile.
- Establishing a housing policy monitor for regular monthly tracking of both market prices and the uptake of resources from government programs.
It should be noted that the government has already decided to extend the tax exemption measure for property owners who renovate their properties, which will be reflected in future legislative provisions,
In addition to the new measures announced, the economic staff is also working on various other options, including a scenario of mandatory payment of rent through the banks in order to improve transparency, since the average declared rent does not match reality, which means that many owners evade tax.
The Ministry of Finance is examining a wide range of incentives aimed at increasing the housing supply.
- One proposal that has been put on the table is to remove the government rent subsidy for tenants who do not meet their obligations.
- A scenario of imposing an inactivity tax on those who leave their properties closed is being examined.
- Proposals for changes to the tax scale on real estate income are also on the agenda. At present, this income is taxed as follows:
- Up to 12,000 euros: 15%
- From 12,001 to 35,000 euros: 35%
- Above 35,000 euros: 45%
The option of introducing intermediate rates is being examined (for example 20% or 25% for income from 12,001 to 20,000 or 25,000 euros), so that the tax burden becomes more proportionate. It is reasonable to assume that these changes will apply only to income from long-term rentals, while the existing brackets will be kept for short-term rentals (Airbnb-style).
Greece ranks among the top 5 EU countries for luxury hotel investment
Greece has established its position as a prominent destination for luxury hotel investment, securing a place among the five top markets in the European Union for luxury hospitality in 2024.
With a sharp rise in strategic investment, 12,000 new hotel rooms were added last year, including 8,500 in four- and five-star properties, according to data from the Hellenic Hoteliers Federation processed by INSETE Intelligence.
The European luxury hotel market saw significant transactions worth 10.95 billion euros in 137 deals involving four- and five-star hotels in 2024, as reported by Global Asset Solutions. Despite a volatile economic climate, the sector maintained strong momentum, with Greece standing out for its quality supply despite fewer transactions.
Greece's high-value transactions
Greece recorded investments worth 438 million euros in just four transactions, accounting for 4% of the entire EU hotel investment market. The country achieved the highest average deal value in Europe, at 109.5 million euros, and an impressive price per room of 332,000 euros, surpassing countries such as Sweden and Germany. A total of 1,321 rooms changed hands, with an emphasis on luxury properties.
The most notable transaction was the purchase of the Grand Hyatt Athens, a 548-room hotel that marked the largest hotel deal in Europe by number of rooms in 2024. This deal underscored Athens's growing appeal as a hub for luxury hospitality investment. Other top destinations such as Mykonos and Santorini also drew considerable interest, strengthening Greece's reputation for “trophy assets” - iconic properties with premium valuations and strong growth potential.
Record-breaking room additions
The Greek hotel sector saw unprecedented growth, with 24,649 new rooms added between 2023 and 2024, breaking previous records. In 2024 alone, investment in new construction and renovations reached 2.805 billion euros, a slight increase of 0.4% from 2.795 billion euros in 2023.
The broader tourism sector, including non-hotel accommodation such as villas, contributed 5.063 billion euros in investment in 2024, with 2.440 billion euros in domestic value-added spending. Hotel revenues also rose by 8.8% to 11.5 billion euros, thanks to steady demand in the high season and growth in off-season tourism, which increased occupancy and rates in year-round hotels.
A bright future for Greek tourism
Greece's focus on quality, strategically located properties has positioned it as a mature market for luxury hospitality. The country's ability to attract selective, high-value investment underscores the resilience of its high-income tourism sector. As global investors continue to keep an eye on Greece's iconic destinations, the country is poised to maintain its competitive advantage in Europe's luxury hotel landscape.
Romania
Hagag announced the establishment of a Radisson hotel in Bucharest
Hagag Development Europe announced its entry into the hotel sector and the establishment of a hotel under the Radisson RED brand in central Bucharest. The building, dating from the 1940s, has served as an office building and will be converted, in an investment estimated at 13 million euros, into a 104-room hotel.
The mayor of Bucharest, Nicușor Dan, was elected president of Romania
After more than half a year of political chaos, Romania's presidential election campaign ended with the victory of the mayor of Bucharest as president of Romania.
After the Constitutional Court disqualified the candidacy of Calin Georgescu at the end of the first round of the presidential election at the end of 2024, Romanian President Klaus Iohannis resigned and an interim president was appointed.
At the end of the first round of the presidential election on 4 May, George Simion, who was backed by Georgescu and the far-right AUR party, came first, while the ruling coalition's candidate, Crin Antonescu, came only third (and following the election results the prime minister resigned), and the surprise runner-up was the mayor of Bucharest, Nicușor Dan, who is an independent candidate.
In the second round of the election, held on 18 May, the race appeared to be close, with the candidates mainly emphasizing their positions on Romania's continued membership in the European Union, but the election results showed a clear victory for Nicușor Dan, who immediately upon his election began contacts to form a new government.
Despite his victory, it is important to remember that Romania remains a country with political and social tensions. George Simion, Nicușor Dan's rival, challenged the election results in the Constitutional Court (an appeal that was rejected), and the social tensions that led to broad support for the nationalist candidate still exist. The president-elect himself admitted that “the tension in society will remain for months or years”
From the writer's desk:
1. The victory of Nicușor Dan, known as pro-European and a supporter of the rule of law, may bring greater political stability and strengthen Romania's commitment to the European Union and to the NATO alliance. For investors, this is a positive sign that conveys regulatory certainty, compliance with European standards, and a business environment more open to foreign investment.
The victory of a candidate who supports the continuation of Romania's pro-Western line will be reflected in continued support for Ukraine and in strengthening ties with the European Union and the United States. This is an important factor for developers and investors operating in a global environment.
2. In his messages, the president-elect stressed the need for a “fundamental change” in Romania's government and state institutions. As mayor of Bucharest, he is already known for his activity against corruption and for promoting good governance. As president, he is expected to work to strengthen state institutions and to reduce bureaucracy and corruption.
3. In his inauguration speech, the president-elect addressed Romania's economic situation, stressing that “the Romanian state is spending more than it can afford”. This statement hints at a more cautious economic approach, with an emphasis on budgetary responsibility and on creating an environment that will attract investment.
Nicușor Dan's victory in Romania's presidential election signifies a clear preference for stability, pro-European reforms and the fight against corruption. For developers and investors, this is a positive sign that heralds a more predictable business environment, with an emphasis on good governance and attracting investment. However, it is important to remain alert to the existing political and social tensions and to follow the implementation of the promised reforms.
Bulgaria
What will happen to real estate prices with the transition to the euro
The upcoming transition to the euro, expected on 1 January 2026, is raising doubts and concerns. Beyond political disagreements, many citizens are worried about rising prices. While the government insists that it will prevent speculative increases and the rounding up of prices on everyday products, there is one market in which regulation has limited influence - real estate. This market operates on the principle of supply and demand, and real estate prices have jumped several times in recent years, even though Bulgaria has not yet joined the eurozone. Real estate transactions have been conducted mainly in euros for a long time, but there is concern that joining the eurozone may accelerate the rise in real estate prices.
One argument feeding these concerns is the expected decline in the mandatory reserves that banks must hold at the Bulgarian National Bank, from 12% to only 1%. This change is expected to release about 15 billion leva, which could be used for mortgage loans and inflate the real estate bubble even further.
A report recently published by the Bulgarian National Bank indicates that current real estate prices are about 13.3% higher than sustainable long-term averages, although a slowdown in the market is evident. However, the economist Stoyan Panchev, co-founder of the Expert Club for Economics and Politics (EKIP), stresses that while lower bank reserves may lead to greater liquidity in lending, this does not guarantee a price surge. According to Panchev, this additional liquidity could be limited by rising interest rates, perhaps by aligning Bulgarian interest rates with those of the European Central Bank, or by a recession or a financial crisis. Without these brakes, increased liquidity could indeed push property prices upward.
Panchev adds that general inflation and price rises are expected after the adoption of the euro, but the real estate market is unique and unpredictable because of these various factors. Mortgage interest rates in Bulgaria are very low today, but economic principles indicate that they may rise to more average levels over time, regardless of the adoption of the euro.
Ivan Velkov, of the Bulgarian Industrial Association and vice president of the World Council of Experts at the International Real Estate Federation, believes that the speculative rise in property prices has already been absorbed by the market. He argues that the adoption of the euro itself will neither accelerate nor slow property price trends, which are shaped mainly by domestic economic conditions. Velkov stresses that inflation, both in Bulgaria and across the European Union, is the main factor affecting real estate prices across the continent - calmer inflation means more stable price growth everywhere.
Velkov also downplays the impact of the 15 billion leva that banks may gain from lowering the reserve requirements. Compared with the total value of Bulgaria's building stock, which amounts to hundreds of billions, this sum is relatively negligible and is not expected to affect the market dramatically. Instead, he points to government investments, such as road paving and grants, as stronger factors channeling money into real estate and pushing prices upward.
Whether prices will rise faster after the adoption of the euro remains unclear. For now, the real estate market is still growing, but at a slower pace. Panchev notes that the rapid price increases seen in recent years cannot continue indefinitely, as the market approaches levels last seen before the 2008 financial crisis. Meanwhile, Velkov foresees a change in market dynamics, with modern, high-quality construction becoming essential. Sellers who do not meet these standards may find it increasingly difficult to sell their properties.
Cyprus
The Central Bank of Cyprus - a slowdown in the rise of apartment prices
The rise in residential property prices continued to slow in Q4/2024, according to the Central Bank of Cyprus, which noted that the main reasons for this are the high cost of building materials and the high cost of loans.
Based on the quarterly results of the Central Bank of Cyprus, during Q4/2024, on an annual basis, the Central Bank of Cyprus residential property price indices (houses and apartments) registered a slowdown in the rise, with the apartment price index registering a larger slowdown compared with the house price index.
Various indicators show that the real estate sector appears to be registering a general slowdown in its upward trajectory, as reflected in the slowdown in the rise in the number of transactions, combined with the increase in supply (an increase in the availability of housing for rent and for sale).
Factors holding back the expansion of activity in the real estate sector, according to the Central Bank of Cyprus, are the cost of building materials, which continues to fluctuate at high levels, as well as the cost of loans, which continued to be relatively high in the period under review compared with the previous five years.
According to the bank, in Q4/2024 a sharp rise in the price increase was recorded only in Paphos (13.4%), while a slowdown was recorded in Nicosia, Limassol, Larnaca and Famagusta (0.7%, 4.4%, 6.5% and 9.2%, respectively).
On an annual basis, a sharp rise in the increase in apartment prices was recorded in Paphos (14.7%), while a slowdown was recorded in Limassol and Famagusta (5.1% and 7.8%, respectively).
Nicosia recorded a decline (-0.4%), while Larnaca recorded a stable annual growth rate (6.1%).
On an annual basis, the rise in apartment prices slowed in all districts. In Nicosia, apartment prices rose by 2.6%, in Limassol by 5.5%, in Larnaca by 8.7%, in Paphos by 12.1% and in Famagusta by 14.2%. During the fourth quarter of 2024, an annual increase was recorded in the number of sale documents in all districts except Nicosia and Famagusta, where a decrease was recorded.
Portugal
The elections ended without a decisive result for the 3rd time
Portugal has gone through a period of relative political instability in recent years, with 3 repeat elections in 3 years. The most recent election in May 2025 was a defining event, and it came after the dissolution of parliament by President Marcelo Rebelo de Sousa. The housing crisis and the rise in property prices were central issues in the campaigns of the various parties.
The May 2025 election left Portugal with a center-right government headed by the Democratic Alliance (AD), made up mainly of the Social Democratic Party (PSD) and the People's Party (CDS). The incoming (and also outgoing) prime minister is Luís Montenegro, even though the election was held because of a corruption affair in which he was involved. The AD won about 31.8% of the vote and 91 seats in parliament.
The significant change is the substantial rise of the far-right party Chega! (Enough!), headed by André Ventura, which won about 22.8% of the vote and 60 seats, thus becoming the second-largest political force, while the Socialist Party (PS), which led the move to elections, lost strength and finished third with about 22.8% of the vote and 58 seats.
From the writer's desk:
1. The previous government removed real estate investments from the list of options eligible for the “Golden Visa” in August 2023, in an attempt to combat rising housing prices and speculation in the real estate market. The Democratic Alliance (AD) and the parties on the right are generally more inclined to support foreign investment. There has already been talk of the possibility of reexamining the “Golden Visa” program, perhaps by restoring the real estate option in some format, or by creating new incentives. Although no official policy updates have yet been published, the government's intention to improve the visa and tax programs in order to make Portugal a more attractive investment destination can be heard. Projects of affordable housing, long-term rental housing, or developments in sparsely populated areas may be addressed.
Although there is not yet official confirmation, the current government's position is more pro-investment, and this may translate into positive changes to the “Golden Visa” program in the future. Demand for the “Golden Visa” in Portugal rose significantly over the past year, even without the real estate option, which indicates confidence in the country.
2. The housing crisis is a burning issue in Portugal, with apartment prices having risen dramatically in recent years. The new government will face pressure to address this issue. While the Socialist government took steps such as restrictions on short-term property rentals (Airbnb) and promoting public housing, the current government may take different approaches. On the one hand, there may be less government intervention in property rental restrictions, and on the other hand, the government may promote programs that will lead to an increase in the housing supply, for example through construction easements or the release of land.
3. Portugal continues to be an attractive destination for investors because of its quality of life, developing tourism and strategic location. Despite the political changes, the strong fundamentals of the Portuguese real estate market remain intact: demand from holders of other visas (such as D7 and D8), competitive rental yields in tourist areas, and property prices that are competitive relative to Western Europe. The new government is expected to continue to support domestic and foreign investment.
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