Hello,
With Rosh Hashanah around the corner, and with the real estate market in Israel at a crossroads and a not-insignificant share of investors “sitting on the fence” or waiting for price declines, real estate prices in Europe continue to rise.
This month we would like to bring to your attention:
A. Greece's economy - a growth path versus domestic challenges.
B. Analysis of the real estate market in Greece in August 2025.
C. Apartments in Romania are selling faster but the price is more open to negotiation.
D. Romania - opportunities and challenges in a period of “recalibration”.
E. Bulgaria's economy, August 2025 - resilience and stability.
Wishing you a good and blessed year,
Adv. Ilan Leibovitch and the office team
Greece
Greece's economy, August 2025 - a growth path versus domestic challenges
The Greek business press analysis in August 2025 reveals a picture of an economy moving along several tracks at once. The central track is one of strategic transformation, led by the government, which is expressed in the restructuring of public bodies, the launch of new investment funds and the promotion of growth-supporting legislation. This track, driven by fiscal discipline and work with the European Union, points to a long-term vision of building a resilient and diversified economy.
However, alongside the macroeconomic progress, Greece faces domestic challenges that test the government's policy line. Inflationary pressures, mainly in food prices, require a constant response and draw the attention of policymakers. The government's ability to maintain a delicate balance between preserving a responsible fiscal framework and responding to citizens in the fight against the cost of living will be critical for continued economic and political stability.
These developments suggest an outlook in which the coming months will continue to focus on dealing with inflation, on implementing the economic package to be announced at the Thessaloniki fair, and on the progress of new investment projects. The overall picture is of an economy that continues to move from a recovery model to a strategic growth model, aimed at securing Greece's economic future.
Real estate market analysis - August 2025
According to Spitogatos Insights, home prices continue to rise across Greece, creating a dynamic environment for the real estate market. The constant rise affects both tenants and buyers, and reinforces the need for careful research and informed choices.
Real estate prices (for sale and for rent) are on an upward trend in the second quarter of 2025
During the second quarter of 2025, the Greek real estate market continued on its price-rise path. Specifically, compared with the second quarter of 2024, residential property prices rose by 9.7%, while rents rose by 7.2%. It is worth noting that this trend already continues the trend in the first quarter of 2025, when sale prices rose by 2.8% and rents by 4.2%.
Factors affecting the real estate market
Prices are affected by several factors operating (almost) simultaneously. The completion of the “My Home 2” program (a mortgage program designed to help young people, aged 25 to 50, buy their first home) increased demand for properties worth up to 250,000 euros, giving a boost to specific areas. With the start of the tourist season, prices in tourist destinations - such as the Cyclades islands and Chania - are rising significantly due to increased seasonal demand.
At the same time, financial support measures for tenants offer some relief, but do not completely offset the pressure from rising prices. Finally, the publication of the national exam results and the admission of students to universities lead to an increase in demand for student housing in cities with educational institutions, which directly affects rents in specific areas.
High housing costs in the Cyclades islands and the southern suburbs of Athens
In the residential real estate market, the southern suburbs of Athens lead as the most expensive area for buying homes, with the average asking price reaching 4,052 euros/sq.m. Close behind are the Cyclades islands, the northern suburbs of Athens, Lefkada and Chania.
In terms of rental housing, the Cyclades islands top the list with an average asking rent of 15.3 euros/sq.m., followed by the southern and northern suburbs of Athens with 13.0 euros/sq.m. and 11.4 euros/sq.m., respectively.
More affordable purchase options are located mainly in cities such as Kastoria, Kozani, Florina, Kilkis and Grevena. Similarly, the most affordable rental markets include Kilkis, Pella, Thessaloniki, Grevena (4.8 euros/sq.m.) and Imathia (5.0 euros/sq.m.).
Apartment prices in Athens and its surroundings are changing dynamically
In Athens and its surroundings (Attica), the differences in residential purchase and rental prices are noticeable. The most expensive areas include Vouliagmeni, Voula, Glyfada, Elliniko and Kolonaki, while more affordable purchase options can be found in Agia Varvara, Varnava, Acharnes and Patisia.
In Thessaloniki, too, apartment prices keep rising
The real estate market in Thessaloniki is undergoing significant changes, with the most expensive areas for buying including Kalamaria (3,047 euros/sq.m.), the city center and Toumpa. On the other hand, for more affordable options, one can look in areas such as Axios (779 euros/sq.m.), Kallithea and Migdonia.
Student housing market insights
In the second quarter of 2025, the asking rent in the student housing segment registered a notable increase of 7.4% year over year, slightly exceeding the 7.2% growth in the broader rental market.
In Attica, the average asking rent for student housing rose by 5.4%, with Nikaia offering the most affordable options (about 9.0 euros/sq.m.), while in areas such as Kolonaki, Mets and Koukaki prices reach 13-16.5 euros/sq.m. The Zografou area remains popular, with an asking rent of 534 euros for small apartments.
Thessaloniki recorded the largest increase (10.9%), with cheap solutions in Stavroupoli and Evosmos, and more expensive solutions in central Thessaloniki and the 40 Ekklisies - Evaggelistria area.
In the rest of Greece, reasonably priced options can be found in Drama, Lamia and Kastoria, while tourist pressure in Chania, Corfu and Rethymno pushes prices up significantly. However, impressive increases are seen in Florina, Sparti, and Chania, showing that student housing remains a highly dynamic and unpredictable field.
Our media coverage
Everyone is running to Greece, Cyprus, Bulgaria and Romania. Low purchase tax, exemption from capital gains tax, “Golden Visas”. On paper it looks tempting. A smart investor does not check only numbers. He also checks people, environment and a sense of security.
Just as you do not put all your money into one stock - so too it is not right to invest in only one apartment.
Romania
Apartments are selling faster, but the price is more open to negotiation
The annual 'Market 360' report of Imobiliare.ro sheds light on market dynamics in the big cities, presenting a combination of a fast sales pace alongside growing flexibility in price negotiation.
Key housing market trends:
- Speed of sale: apartments in Romania are selling faster today. However, property owners are more willing to negotiate the final price, which affects the pricing strategy of each developer.
- Price rise: in the cities of Brașov, Iași and Constanța, a price rise of 12%-16% was recorded over the past year.
- Seller behavior: sellers' flexibility is growing, and negotiation has become an integral part of the sales process.
Differences between the main cities:
- Bucharest - the fastest market: the city continues to lead in sales pace, with deals closing in an average of only 47 days in the second quarter of 2025, compared with 53 days in the corresponding quarter of 2024. The negotiation margin rose slightly from 3.5% to 4.1%.
- Cluj-Napoca - the most expensive and most flexible: despite having the highest housing prices, the market in Cluj is the slowest. Properties sell in an average of 78 days (75 in the corresponding quarter of 2024). However, developers and property owners in the city are the most flexible in negotiation, with a margin that reached almost 5%.
- Timișoara - stability and high demand: the real estate market in Timișoara is considered one of the most stable in Romania. Properties sell there in less than two months (52 days on average), which makes it the second-fastest market in the country. The city is also characterized by the lowest negotiation margin, standing at 2.5%, which indicates high confidence among buyers and sellers.
- Brașov, Iași and Constanța - growing markets: in these cities the sales pace stands at about two months. In Brașov and Iași a significant increase in negotiation margins was recorded, to 3.1% and 4.1%, respectively. By contrast, in Constanța the margin actually narrowed because of strong demand.
Q2/2025 data
Opportunities and challenges in a period of “recalibration”
In recent years the Romanian real estate market has experienced impressive growth, but the data in the new report by the consulting firm iO Partners point to a change of direction. The market in the Bucharest metropolitan area and Ilfov, the country's economic engine, is now entering a period of what analysts call “recalibration”.
On the surface, the data look mixed: in the first half of the year there was a decline of about 10% in the number of transactions. At first glance, this figure could indicate a slowdown in demand or deterrence on the part of buyers, but at the same time prices continued to climb consistently, with an increase of about 9.3% that brought the average price per sq.m. in Bucharest to more than 2,100 euros. What explains this gap?
The reason lies in several factors operating in parallel: high inflation, a significant rise in construction costs and a limited supply of new housing, especially in Ilfov County. These conditions create pressure on prices, as contractors pass the rise in costs on to the end consumer. At the same time, the data show a significant difference between the areas: while Bucharest itself recorded a decline in transactions, Ilfov actually recorded a slight increase, mainly thanks to more competitive land prices and high availability of building land.
The near future also holds interesting dynamics: developers report plans to add about 10,800 new housing units to the market in the second half of the year - an increase of 15% compared with the corresponding period last year. If these plans materialize without delays, they can be expected to affect the balance between supply and demand.
From the writer's desk:
For real estate developers and investors, this period is not a sign to hold back, but rather an opportunity. The current market behavior may filter out less professional developers, and create an opening for experienced investors to enter the market at more attractive prices. An in-depth analysis of the specific characteristics of each area, mainly the gaps between Bucharest and Ilfov, will help identify the best opportunities and ensure the success of the investment over the long term.
Bulgaria
Bulgaria's economy, August 2025 - resilience and stability
The economic estimates for August 2025 present a picture of continued growth, although at a more moderate pace than expected. According to the flash estimate of the National Statistical Institute (NSI) published on 14 August, Bulgaria's gross domestic product (GDP) grew by 0.7% in the second quarter of 2025 compared with the previous quarter. In annual terms, growth stood at 3.1% relative to the corresponding quarter of 2024, identical to the growth rate recorded in the first quarter of 2025. This growth is driven mainly by private consumption, which rose by 0.9% in the second quarter and showed annual growth of 6.5%.
Despite the encouraging data, it is estimated that economic growth will slow in the second half of the year. Major institutional forecasts for 2025 point to different estimates, but all point to moderation. The Bulgarian National Bank (BNB) revised its growth forecast upward to 2.9%, while the European Commission (EC) forecasts 2.0% and the OECD forecasts 2.6%. These figures are consistent with the assessment that Bulgaria will remain among the fastest-growing economies in the eurozone. Growth based on consumption and public investment, supported by European Union funds, creates a positive economic environment that supports demand for both residential and commercial real estate.
Inflation data in recent months point to continued increases. The annual inflation rate rose to 5.3% in July 2025, after registering 4.4% in June. The rise is attributed mainly to the costs of food and non-alcoholic beverages (7.61% in July) as well as to a rise in the prices of services. In response to this trend, the Bulgarian National Bank revised its inflation forecast upward, and now forecasts inflation of 3.8% in terms of HICP (the EU's harmonized index of consumer prices) for 2025 as a whole. The European Commission itself forecasts inflation of 3.6%.
The rise in inflation, caused in part by lively private consumption and by rising wages, directly affects mortgage interest rates. Nevertheless, the data show that housing loans continued to grow, at a rate of 27.4% in July 2025 in annual terms. Mortgage interest rates are still considered relatively low, with an average rate of about 2.77% for mortgages denominated in the local currency (the Bulgarian lev) and about 3.09% for mortgages denominated in euros. These rates are lower than the eurozone average. The high volume of lending contributes significantly to the momentum in the real estate market.
Bulgaria continues to show stable fiscal performance. Public debt at the end of 2024 stood at 65% of GDP, a figure significantly lower than the eurozone average. However, there is tension between restrained fiscal policy and political and social pressures. Discussions on legislation aimed at imposing caps on bank fees and reducing the statutory interest rate point to an effort to ease the economic burden on households and businesses. This is a complex situation, in which international institutions such as the International Monetary Fund (IMF) note that overly expansionary fiscal policy could increase the risk of overheating and contribute to further price rises. This dynamic underlines the need for a delicate balance between supporting growth and preserving macroeconomic stability.
The good times are over: the American real estate market is stagnant
According to the article, the US housing market is stagnating: prices slowed in the first half of 2025 and in most cities even fell over the past three months, against the backdrop of high interest rates and a slowdown in growth that the article also links to tariffs. The declines are concentrated in the West and mainly in the South, in cities that enjoyed demand during the Covid period such as Dallas and Phoenix, where domestic migration has slowed and projects begun during the pandemic are only now reaching the market. In Florida prices fell by 4% over the past year, among other reasons because of a surge in home insurance premiums, a decline in demand from Canadians and new safety requirements set after the collapse of a residential building in a Miami suburb in 2021. It is also noted that the Federal Reserve is keeping interest rates high to curb inflation, and therefore significant relief for the market is not in sight.
Source: TheMarker, The Economist, 21.08.25
How many Israelis own more than one apartment, and why investors are fleeing the market
According to the article, about 386 thousand Israelis, about 18% of apartment owners, are registered as of June 2025 as owners of at least two apartments. Data from the Treasury's Chief Economist show that apartment purchases by investors fell in the first half of 2025 by 17% compared with the corresponding period last year, and in the second quarter the monthly average fell to about 875 apartments, a historic low; purchases by veteran investors fell by more than 50%. The article attributes the decline to high prices, interest rates, restrictions on developers' financing promotions and a purchase tax (mas rechisha) of at least 8%, and notes that some investors now prefer the capital market or investment abroad. It is also noted that a reduction in the number of investors may reduce the supply of rental apartments, and that the Central Bureau of Statistics reported a 5.9% increase in rents on new contracts.
Source: Globes, Arik Mirovsky, 13.08.25
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