Dear readers,
Just before the end of the calendar year, after the 2026 state budget was approved by the government and does not appear to bring good news for Israeli real estate investors.
Romania, by contrast, following the collapse of the company “Nordis” and the harm caused to apartment buyers, is approving a law that will make life harder for developers who until now relied on investors'/buyers' money to finance construction.
In the countries we cover, apartment prices continued to rise in November as well, and we expect 2025 to end with significant price increases.
This month we would like to draw your attention to:
A. Greece - apartment prices continue to rise.
B. Greece - a rise in real income.
C. Romania - the investment market in Central and Eastern Europe is recovering, and Romania stands out in a trend of a hesitant but steady comeback.
D. Romania - the “Nordis Law” enters the arena.
E. Cyprus - an increase in transaction volume, strong demand in Limassol and positive momentum in residential apartments.
F. “For the price of an apartment in Bucharest, you can't even buy a key in Israel.”
Adv. Ilan Leibovitch and the office team
Greece
Apartment prices continue to rise
In Greece the trend of sharp price increases in the housing market continues, despite a general decline in inflation. According to the latest data from the Bank of Greece, apartment prices in the third quarter of 2025 are on average about 7.7% higher than in the same period last year, with increases recorded across the country: about 6.6% in Athens, 9.6% in Thessaloniki, 8.9% in the other large cities and about 8.5% in the rest of the regions.
This is the fifth consecutive year of sharp increases in apartment prices, some of them double-digit, at a time when overall inflation has already returned to levels of only about 2%-3%. The meaning: the cost of housing is drifting away from household incomes, and the housing crisis in Greece is deepening.
To provide immediate help to tenants, in November the government is launching for the first time the “rent refund” program (Epistrofi Enoikiou). More than a million tenants received a refund directly into their bank account at the end of November, without needing to submit an application. The refund is based on 1/12 of the annual rent reported in the 2024 tax returns, for the main residence and for student housing. The annual refund is capped at 800 euros for main residences, with an addition of 50 euros per child, and up to 800 euros more for student housing, subject to criteria of income, assets and method of payment (priority for electronic payment).
Alongside direct support for tenants, the government is also trying to address the supply side:
- The “Renovate-Rent” program subsidizes the renovation of vacant apartments of up to 100 sq.m. on condition that they are made available for long-term rental.
- Activation of state properties and “social regeneration” mechanisms is being promoted to create a stock of affordable housing.
- The criteria are being expanded in the “My Home 2” program, which provides subsidized mortgages to young couples.
Economists and the Bank of Greece warn that any increase in demand, whether through subsidized mortgages or through rent subsidies, could fuel further price rises as long as new supply is limited, especially in older apartments in sought-after areas and city centers.
From the writer's desk:
For Israeli investors who hold property in Greece or are considering entering the market, it is important to understand:
- 1. The price environment continues to rise, but regulation around rentals is also tightening.
- 2. Programs such as the “rent refund” encourage transparent reporting and closer monitoring of the rental market by the authorities.
- 3. Every investment decision should take into account not only the gross yield, but also rental taxation, the eligibility conditions for subsidy programs, and “bubble” risks in certain areas.
Greece: a sharp rise in real income
According to Eurostat data published this week, Greece recorded a jump of 22.3% in real income per capita between 2017 and 2023, one of the most significant increases in the European Union in this period. This figure gains added importance against the background of years of moderate growth and economic rehabilitation after the debt crisis.
The improvement rests on two main factors:
- 1. A rise in household income following the recovery of the labor market and improved wages.
- 2. A sharp decline in inflation since last year, which restored purchasing power to a million Greek households.
According to the report, Greece shows a rise almost three times as fast as the European average, while many countries in Western Europe even recorded a decline in real income in recent years. The figure reflects an important change of trend: Greek households today enjoy higher purchasing power, and private consumption is strengthening accordingly.
Romania
The investment market in Central and Eastern Europe is recovering, and Romania stands out in a trend of a hesitant but steady comeback
A new Colliers report presents an optimistic picture of the real estate market in Central and Eastern Europe (CEE) for 2025. Investment volume in the first three quarters of the year reached 4.8 billion euros, an increase of 38% compared with the same period in 2024. Although overall activity is still below the historical average, the trend is positive and clear: international capital is slowly returning to the region.
Poland leads the market with almost half of total transactions, followed by the Czech Republic.
But within the regional trend, Romania is marked as a country that is beginning to gain interest from investors again, though still in relatively modest volumes.
According to the report, investment activity in Romania in the first three quarters of the year totaled just over 450 million euros only (a 6% share of real estate transactions in the Central and Eastern Europe region, down from more than 8% in 2024 and a peak of more than 11% in 2022), a figure that places it behind the other leading countries, but underscores that in Bucharest and the other urban centers too, an improvement in demand is beginning to be seen, mainly in the industrial and logistics sector.
“2025 looks similar to 2019 - a year that was not especially strong in terms of volumes, but was followed by two strong years that prepared the ground for the peak of activity seen in 2022. In the same way, in the first three quarters we see a number of transactions in the market that are currently at various stages of execution. 2026 has the potential for yield compression provided that the local and global macroeconomic environment remains at least neutral. Analysts' expectations of further interest rate cuts by the European Central Bank support this outlook for next year,” explains Robert Miklo, Partner, Head of Capital Markets at Colliers.
“Romania remains an attractive market for investment thanks to healthy yields and growth potential in emerging sectors. Prime yields stand at about 7.5% and 7.75% for premium office and industrial projects, respectively, higher than in the Czech Republic or Poland, which makes the local market attractive to investors seeking solid opportunities for the medium to long term,” stresses Silviu Pop, Head of CEE and Romania Research at Colliers.
Colliers notes that investors in Romania continue to exercise caution, and transactions are mostly one-off and targeted, but the momentum is positive. Growing interest from international funds and deals in the making indicate that the main change of the year is a shift in the perception of risk:
Investors are beginning to see Romania anew as an “emerging market” rather than a “risky market.”
The logistics sector is still the main force driving the entire region, and Romania is no exception: strong demand from e-commerce and industry is increasing leased volumes and reinforcing yield stability.
In summary, Colliers determines that the region is at an “early stage of recovery,” but the signal for investors is clear:
Opportunities in Eastern Europe, and in Romania in particular, are beginning to open up again, for those who understand how to read the market before the next wave.
Romania: summary of Q3/2025 data
Romania purchased drones worth 400 million dollars from Elbit
A few years ago, the Romanian Ministry of Defense signed a 400 million dollar deal with the Israeli company Elbit for the development of seven Watchkeeper X systems, which will be used to detect Russian activity near border areas. The drones will be delivered in a few months (the contract between Romania and Elbit was signed in 2023, but delivery of the first drones was delayed because of the war between Israel and Hamas).
Each Watchkeeper X system consists of a command center, communications systems and three drones.
The aircraft will be built in Romania, but the first drones are currently being tested in Israel. They fly at an altitude of 1,000 meters and identify any target within a radius of 200 kilometers. They are also equipped with a state-of-the-art camera that identifies people from a distance of 4-5 kilometers.
The mission of the Watchkeeper X drones is mainly surveillance, but the aircraft can also be equipped with missiles if necessary. The drones can stay in the air for 16 hours without refueling and significantly assist in coordinating forces by providing real-time information on enemy forces.
The 7 Watchkeeper X systems will be divided among all the general staffs of the Romanian army: 3 for the land forces, 3 for the naval forces and one system for the air force. The drones can be used for at least 15 years, after which they will undergo modernization.
The Watchkeeper X drone has not been tested in combat; however, its predecessor, the Watchkeeper model, proved very helpful in the war in Afghanistan. Britain used the aircraft to locate insurgents and to ensure the safe withdrawal of allied forces.
After delivery, the Watchkeeper drones will become the Romanian army's main asset for intelligence, surveillance and reconnaissance missions. In combat scenarios, the Ministry of Defense can rely on Bayraktar drones to attack enemy positions.
Drones have been the subject of renewed military investment around the world, in light of their vital role in the war in Ukraine. Romania, in particular, has also experienced Russian drones violating its airspace about 13 times since the start of the war. The latest incursion took place on November 25.
In response to the drone incursion, the commander of US Army forces in Europe and Africa, General Christopher Donahue, said that “Romania will soon have a new military system capable of shooting down drones entering the national airspace.”
The “Nordis Law” enters the arena
Last month the Romanian parliament approved what the media call the “Nordis Law” - new legislation intended to regulate more strictly the collection of advance payments in “off-plan” real estate transactions and to protect apartment buyers from stalled projects and misuse of their money. For Israeli developers and investors active in Romania, this is a deep change in the rules of the game, with new risks, but also the creation of a safer and more transparent environment in the long term.
What does the new law provide?
The core of the law is a dramatic limit on the amounts that developers and contractors may collect from buyers at the various stages of construction. The reservation payment, the sum customarily paid to hold a future apartment in a project, will from now on be limited to only 5% of the sale price, and for a maximum period of 60 days. Within this period the parties must move on to a binding commitment contract (a pre-contract or promisiune de vânzare) or to a final sale contract; if this is not done through the developer's fault, the developer will be obliged to return to the buyer the full amount paid.
Even after the reservation stage, the law limits the scope of advance payments according to actual construction progress: a maximum percentage after completion of the structural frame (25%), a further percentage after completion of the building systems (20%), and in practice the total payments the developer may receive before handing over the property will remain at 50% of the apartment's price. In addition, all funds paid by buyers must be deposited in a bank account dedicated to the project, which may not be used to finance other projects or for the company's general needs. The developer may withdraw funds from the dedicated account only in line with real, proven progress of the project
The law prohibits demanding and collecting: special fees, “commitment” payments, payments for “security,” and early development fees. Any amount not defined in the law may not be collected in advance.
Under the law the developer may not: change the specification, enlarge common areas, change the apartment's area or change a storage room/parking space without the buyer's explicit consent.
The law also tightens the terms of the contracts themselves: it is no longer possible to sign commitment agreements to sell apartments without a valid building permit and without registration of the project and sub-units in the land registry. Contracts must be drafted and signed in authentic form before a notary, with land registry registration. Departing from the restrictions may lead to complete nullity of the agreements and even significant financial penalties for the developer.
The “Nordis Law” marks a new stage in the Romanian real estate market: a more regulated market, in which it is no longer possible to sell dreams on paper without a solid legal and financial basis.
On Friday 5/12/2025 the President of Romania signed the ratification of the law, and it is due to enter into force a week later (at the end of this week).
From the writer's desk:
What does this mean for developers?
For real estate developers in Romania, and in particular Israeli developers accustomed to a financing model that relies heavily on buyers' money, the new law requires a paradigm shift. It is no longer possible to “finance construction from the customers”: early cash flow shrinks, and the ability to draw large sums at an early stage of the project is limited by law.
The practical meaning is a need for higher equity, orderly bank financing and building financial models based on stable sources of financing rather than generous buyer advances. A developer who does not plan for this in advance may find himself in a project whose financing does not add up, or worse, exposed to lawsuits, cancelled contracts and regulatory fines.
On the other hand, the law is expected to “clean” the market of problematic players and raise the professional bar. Serious developers with financing capacity, experience and sound risk management will stand out more in the new market, in which it is not possible to rely on excessive advances or on vague contracts.
What does this mean for investors and apartment buyers?
For apartment buyers and real estate investors the law increases the level of protection, especially in pre-sale transactions. The cap on advance payments, the requirement for project-dedicated accounts, and the obligation to have a building permit and land registry registration before commitment agreements are signed are all intended to reduce the risk of the familiar stories of uncompleted projects and vanished funds.
However, it is worth noting that even in a more protected regulatory environment, the responsibility for professional due diligence - legal, financial and physical - does not disappear. On the contrary: when the rules become more complicated, the need to understand in depth whether the developer is acting in accordance with the new arrangement, whether its financing structure is sound, and whether the contracts correctly reflect the law's protections becomes even more critical.
Cyprus
An increase in transaction volume, strong demand in Limassol and positive momentum in residential apartments
The Cypriot real estate market sums up 2025 with a clear trend: lively activity, high sales volumes and a qualitative rise in demand, despite a slight cooling in the number of building permits. According to data from the Real Estate Agent Registration Council published in the Cyprus Mail, between January and September 2025, 13,173 ownership transfers were carried out in Cyprus - an increase of about 13% compared with the same period last year. The total amount of funds reached about €3.49 billion, an increase of about 12.6%, a figure that illustrates the continued growth and the shift toward transactions in more expensive, higher-value properties.
One of the main drivers of the recovery is the apartment sector. The RICS Cyprus price index, in cooperation with KPMG, indicates that residential apartments are the category leading the rise in the market, while commercial properties, and especially retail, continue to stagnate. Apartments, and at times also private houses, offices and warehouses, enjoy firm demand from local residents and international buyers alike, alongside significant activity by real estate investors seeking high yields and a stable market.
Limassol continues to be the “star” of the Cypriot market. The city maintains an impressive share of about 37% of total national transaction volume, with transactions worth about €1.3 billion in the first three quarters of the year. At the same time, the rental market in Limassol is becoming tighter and more expensive: the average rent crossed the €3,000 per month mark last summer, almost double the average in Larnaca. The supply of apartments for rent is shrinking steadily, from more than 3,200 apartments at the start of the year to only 1,390 in July, a figure that illustrates the depth of the long-term housing shortage in the city.
At the same time, the construction industry in Cyprus presents a complex picture: the number of building permits fell, but the total value of the approved projects actually rose. This figure points to a change in the nature of development, fewer small projects, more large-scale initiatives, luxury projects and ventures intended for the international market. For investors, the meaning is relative stability in future supply alongside a narrowing of cheaper developments, which may support prices in the coming years.
From the writer's desk:
2025 reinforces Cyprus's standing as a leading real estate destination in the eastern Mediterranean. A dynamic residential market, a supply squeeze in Limassol, a rise in transaction volumes and a shift toward investment in higher-value properties all point to a positive trend.
For Israeli investors, Cyprus continues to offer a rare combination of geographic proximity, stable regulation, high demand and especially attractive yields.
“For the price of an apartment in Bucharest, you can't even buy a key in Israel”
The article, the fifth in a series in Yedioth Ahronoth, deals with the growing interest of Israeli investors in Bucharest, which in the 2000s was considered a problematic destination, and cites a figure from the investropa site according to which housing prices in the city rose by more than 18% over the past year. According to the article, prices vary greatly between parts of the city: about 4,500 to 5,000 euros per sq.m. in new projects in the north, about 2,500 euros in the center and about 1,500 euros in the south. The lawyers interviewed, including Adv. Ilan Leibovitch, detail the risks: a person who is not a citizen of the European Union cannot directly hold the land component, Romania has no protection equivalent to Israel's Sale Law, and one must check the building permit, the seller's rights and the permit for renting out. The article also mentions the collapse of the Nordis Group company and the restriction, applying from January, on renting out apartments in buildings at high earthquake risk.
Source: Yedioth Ahronoth, Hila Tzion, 14.11.2025
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