Monthly brief - May 2026

Hello everyone!

While in Israel we await the Bank of Israel Governor's interest rate decision at the end of the month, last month we witnessed 2 political upheavals in Europe, as Viktor Orbán lost the elections in Hungary and Rumen Radev moved from the president's chair to the prime minister's chair, and at the very start of the month in Romania too the government fell in a no-confidence vote and talks began to form a new government.

The Greek government, together with the municipality of Athens and the municipality of Thessaloniki, is trying to cool the rental market through restrictions on short-term rentals.

This month we would like to draw your attention to:

A. The Greek economy: the stagflation risk is taking shape.

B. The real estate market in Greece - April 2026 review.

C. The real estate market in Romania - April 2026: prices at a historic high, transactions at a 5-year low.

D. The short-term rental market - Bucharest breaks a record.

E. Bulgaria - the euro-entry effect is running out.

F. Portugal: apartment prices rose by 12% in a year.

Adv. Ilan Leibovitch and the office team

Greece

The Greek economy: two bodies in one week - “the stagflation risk is taking shape”

What looked in March like a “controlled slowdown” became in April a completely different category. Within just seven days, between April 7 and 14, the Greek central bank and the International Monetary Fund issued forecast updates that point in the same direction: the Greek economy is slowing faster than expected, while inflation, contrary to all forecasts from the start of the year, is accelerating. The technical name for this combination is stagflation. The Bank of Greece no longer shies away from using the word.

The Bank of Greece - April 7: “the stagflationary risk is taking shape”

The Bank of Greece cut its growth forecast for 2026 from 2.1% to 1.9%, and revised its inflation forecast upward to 3.1% - the exact opposite of the decline it had projected a few months earlier. The trigger: a jump of about 22% in oil prices since the outbreak of the Persian Gulf crisis, which alone adds about 0.4 percentage points to price pressure. The bank described the situation as an “external energy shock” - the cause of the slowdown is not an internal failure but fire coming from outside.

The International Monetary Fund - April 14: sharper

A week later, the IMF published the April 2026 World Economic Outlook, with a sharper forecast for Greece: 1.8% growth (compared with the 2% presented as late as the end of March) and 3.5% inflation. The full picture:

The context is also important: the IMF simultaneously cut its global growth forecast to 3.1% (from 3.3% in January), with the Strait of Hormuz crisis defined as the dominant factor. Greece, with its high dependence on tourism and imported energy, is more exposed to this shock than most of its European Union neighbors.

What the numbers do not tell: the bright spots

To keep a sense of proportion - the Bank of Greece and the IMF also note positive directions that create a cushion of confidence for the market. The government debt-to-GDP ratio fell by about 10 percentage points in 2025 to a level of ~145%, compared with a peak of ~210% in 2020, an impressive decline by any measure. Credit to the private sector expanded by 5.3% over a 12-month period (as of January 2026), with especially strong demand from corporations. And there is more: the unemployment rate is expected to fall from 8.9% in 2025 to 7.4% in 2026, a figure that expresses a labor market that continues to tighten even in a challenging environment.

From the writer's desk:

First, it is important to qualify: the April 2026 data are a snapshot of one week, not a verdict. Greece is still growing faster than the eurozone average, and its starting point going into the slowdown is relatively positive (2.1% in 2025, compared with 1.4% for the bloc as a whole). But what is worrying is not the number, 1.8% versus 1.9%, but the direction: two bodies, in one week, cutting forecasts.

Second, and this is the point I think it is important to stress, the market of foreign buyers continues to operate in decoupling from the local macro picture. Golden Visa buyers, and especially Americans who increased their activity by ~49% year over year, are not reacting to Greek inflation - they are reacting to the euro exchange rate, to Greece's relative political security and to the attractiveness of the program itself. Therefore, for premium properties priced for an international audience, the current atmosphere is not a direct risk factor.

In summary: this is not a reservation - it is a call for precision. Between “Greece is growing nicely” and “Greece is in danger of stagflation” there is a large distance, and for now we are somewhere in the middle.

The real estate market in Greece - April 2026 review: national momentum, an Athenian slowdown, and new regulation taking effect

April 2026 ended with two official documents worth following: the Q4 2025 data published by the Bank of Greece on April 30, and the Spitogatos index for the first quarter of 2026 published in the middle of the month. Both point in the same direction - a market that continues to rise, but not everywhere with the same intensity.

What the Bank of Greece said about 2025: the whole of 2025 ended with a rise of 7.8% in apartment prices nationwide, compared with 9.1% in 2024. Q4/2025 alone stood at 7.59% annually. The slowdown in pace is a fact, but the announcement that apartment prices in Greece now stand 8.1% above the 2008 peak, after a total rise of 87.6% since the 2017 trough, illustrates that this is a market that has fully recovered and entered new territory.

The figure that explains the slowdown: foreign direct investment in Greek real estate fell 24% in the first nine months of 2025 compared with the same period in 2024, from €1.925 billion to €1.46 billion, according to Bank of Greece data. Already in the first half of 2025 a decline of 17.8% was recorded, from €1.142 billion to €938 million, a decline that Greek market participants described as “spectacular” and requiring monitoring. The background is clear: 2024 was a peak year with €2.75 billion in real estate investments related to the Golden Visa, and 9,411 initial applications, and afterwards the raising of the threshold changed the equation.

The deepening geographic split: the central finding from Q4/2025 is that Attica is losing the lead. The southern Athenian suburbs still lead in absolute price: Vouliagmeni at €7,333/sq.m., with Voula and Glyfada nearby, but in growth rate, Attica ended Q4 with only 5.9% annually. Thessaloniki: 8% in Q4/2025. The other large cities surprise with 10.5% in Q4 alone. The tourist areas: 8.6%.

Spitogatos index Q1 2026: the average asking price nationwide stood at a rise of 7.9% annually. March 2026 recorded a two-year high of €2,727/sq.m. on average nationwide, and €10.46/sq.m. in rent. April 2026 data as a single month have not yet been published.

The short-term rental market: GreekReporter published on April 28, based on Hosthub data, a picture very different from the restraint that characterizes the sales market. Nationwide, the average income per property rented short-term is up 16.7% compared with 2025, occupancy is up 9.07%, but, and this is the interesting figure, the average nightly price is up only 4.96%. That is: the growth comes from more full nights, not from aggressive price increases. The Athenian Riviera leads the wave: revenue per property there is up 34.5%, RevPAR 32.6%, with a 19.27% rise in the nightly price, which implies the area is moving up a whole category. Thessaloniki also shows a sharp rise: revenue per property is 25% higher, RevPAR 23.9%, with a 10.57% rise in the nightly price.

Regulation that took effect on April 1, 2026: from April, payment of rent outside the banking system, that is, in cash, entails loss of tax benefits for both sides. The tenant loses a grant equal to one month's rent per year; the landlord loses a 5% discount on rental income. This is a step whose purpose is to increase transparency in the rental market and enforce full reporting to the tax authorities.

From the writer's desk:

Greece remains a market with positive growth, with a steady national rise in the range of 7-8% annually. For anyone looking to enter, the time has come to ask not only “Greece?” but “where in Greece?” Thessaloniki, the large provincial cities, and the tourist areas that have not yet priced in all the potential, that is where the momentum is now.

Our media coverage

The American housing market is reaching an extreme point, with the latest data pointing to a sharp decline in the number of active buyers, alongside a renewed rise in the number of sellers.

The absurdity in which a non-resident who wants to buy a home here pays 6 times the tax paid by a new immigrant (oleh chadash) - a tax distortion that strangles the rental supply and gravely harms our young couples.

The Greek government's new move reduces the supply of apartments for short-term rental in Athens and Thessaloniki - and will make Israelis' vacations this coming summer significantly more expensive.

Romania

A political earthquake in Bucharest

The Romanian government fell on May 5 in a no-confidence vote. 281 members of parliament voted in favor, four against. Bolojan's pro-European government fell less than a year after it was formed.

The real story behind the fall

The coalition was built about a year ago to stop the rise of the far right and to reduce the largest budget deficit of any European Union country. Bolojan did what he promised: tax increases, a freeze on public-sector wages and pensions, cuts in government budgets. The PSD paid the political price - public support for it eroded in favor of the far right, and in an internal vote 97.7% supported withdrawing support from Bolojan.

The bitter paradox: the PSD joined forces with AUR, the far-right party against which this whole coalition was built in the first place, to bring down a government that had done the right things economically.

Before the vote Bolojan said: “I will go, but the problems will stay. They are not leaving with me.”

What is expected now?

Early elections are not expected, and the next elections are in 2028. President Nicușor Dan is expected to build a new pro-European coalition under a different prime minister. The PSD has already hinted that it will return. The conclusion: weeks of stagnation, and then a new government with a similar agenda, though doubtfully with the same fiscal determination.

The real threat is timing: Romania must complete reforms to release about 10 billion euros from the European recovery funds before the expiry date in August. A caretaker government cannot complete such commitments. Every week burns time.

How does this affect real estate and what does it mean for the Israeli investor?

Four things I already see:

Financing: the risk premium rises, local banks will keep interest rates high, and fewer local buyers means downward pressure on sale prices in the short term.

Building permits: a caretaker government does not advance files. Developers waiting for permits (PUZ/PUD) will build on a longer timeline. Make sure the delay clauses in your contracts also cover statutory delay.

The rental market: when locals struggle to buy, rental demand strengthens. Good for Buy-to-Rent investors with existing properties.

Distressed deals: periods of uncertainty are historically when the best deals get closed. Local developers who need liquidity become flexible.

And what preserves the safety floor: President Nicușor Dan explicitly stated that Romania will continue on its Western path and will meet the deficit targets. There is no threat to EU membership, and no change in the legal environment that protects foreign investors.

The real estate market in Romania - April 2026: prices at a historic high, transactions at a five-year low

April 2026 ends with two figures that tell one story in two different languages: the national average price of apartments crossed the 2,000 euro per sq.m. mark for the first time, and at the same time, transaction volume recorded its lowest level in five years. This is not a paradox, it is a market undergoing structural change.

According to the Imobiliare.ro index for April 2026: the national average price of apartments for sale stood at 2,025 euros/sq.m. - a rise of 0.8% compared with March, and a rise of 11.9% compared with April 2025.

April 2026 transactions = ANCPI

While prices rise, transaction volume tells a different story. In April 2026, 48,135 properties were sold across Romania, a drop of 5,240 compared with March, and a drop of 1,776 compared with April 2025. In the first four months of 2026 about 42,000 housing units were sold, the lowest volume in five years, a decline of 15% compared with the same period in 2025.

The most active cities: Bucharest (8,024 transactions), Constanța (2,670). Against the current: Brașov and Sibiu in fact recorded an increase in transactions. A positive figure: 804 off-plan property registrations, up from the previous month, against the background of the entry into force of Law 207/2025, which requires full transparency in pre-sale transactions.

What explains the paradox: prices rising, transactions falling

Three structural factors are operating together:

• The stock of new apartments has shrunk because of a decline in building permits, while the supply of older apartments has grown, which creates upward pressure on prices even as demand moderates.
• Construction costs rose sharply in 2025, among the highest in Europe.
• VAT on new apartments rose to 21%.

All three explain why developers are not lowering prices, even when buyers hesitate.

The affordability index speaks for itself: the number of years of wages required to buy a standard apartment stood at 7.9 years at the start of 2026, compared with 7.4 years at the start of 2023. The gap between the rise in prices and the rise in wages accumulates and affects buyers' behavior.

From the writer's desk:

Romania is a market in which prices rise for structural reasons that will not be resolved in the short term, not because of demand that has boiled over. Buyers are responding: taking longer, negotiating, and choosing more carefully. Brașov and Sibiu, which show an increase in transactions, are cities where the healthiest dynamic between demand and supply is currently evident.

Anyone entering the Romanian market now must ask not only “how much does the property cost” but “what is the real cost of holding it, what VAT applies, and what is the net rental yield after tax.” The nominal numbers appear in the headlines. The bottom line requires calculation.

The short-term rental market is maturing - Bucharest breaks a record, Brașov establishes itself as a leading regional destination

A new report by the company Crosspoint Real Estate reveals an interesting picture of the short-term rental (STR) market in Romania for 2025: Bucharest generated €66.8 million from short-term rentals, an increase of 20% compared with 2024, and more than double compared with 2022. The average number of registered units reached 5,507 (an addition of 541 apartments in one year), with an average daily rate of €56.5, an occupancy rate of 62% (among the highest in the cities surveyed), and an average monthly income of €1,006 per property.

By contrast, Brașov is establishing itself as the strongest regional market: €20.4 million in annual revenue, 1,946 listings (+7% YoY) and €10,471 average annual income per property - a financial performance that reflects the advantage of a tourist city that is active all year round, and not only in peak season.

The legal angle that cannot be ignored: on May 20, 2026, EU Regulation 2024/1028 takes effect, requiring formal registration of every property offered on Airbnb/Booking and full data sharing with the local authorities. For anyone who already holds an STR property in Romania, this is a critical turning point: early preparation will preserve the listing on the platforms; lack of preparation may take the property off the market. For anyone considering entry - the 2025 data are the basis for correct pricing, but every revenue model must be re-examined in light of the new compliance costs.

From the writer's desk:

What does this mean for the Israeli investor? The growth is no coincidence, it rests on 2.06 million visitors to Bucharest in 2025, of whom more than 1.1 million were international tourists (+8% YoY). The meaning: demand is international and stable, not only local and seasonal.

Bulgaria

Political drama in Bulgaria too

Rumen Radev, a former fighter pilot who served as President of Bulgaria since 2017 and ended his term only last January, did not go home to rest in the suburbs. He took off the formal presidential suit, put on political work clothes, and led his party to a sweeping victory in the elections of April 19, 2026.

This is an unprecedented move - a former president who returns “to the field” and wins a clear mandate from the people to form a government. For us, as those who accompany investors and developers in Bulgaria, this is an earthquake of stability after years of uncertainty.

The “euro-entry effect” is running out - the market moves to a phase of quality demand

Anyone who followed the Bulgarian real estate market in 2024-2025 saw a phenomenon that happens once in a generation: solid news about the date of entry into the eurozone created a measurable speculative wave, as buyers hurried to close deals before prices, they feared, would “become more expensive with the euro.” That wave led to a rise of 15-18% in 2025 alone. Now, three months after Bulgaria officially joined the eurozone on January 1, 2026, the “wave” has receded, and the real market is beginning to be revealed.

The numbers: a decline in volume, a rise in supply

The January-February 2026 data point to a clear change of direction. Transaction volume fell by about 10% compared with the same period last year, while the supply of new properties to the market jumped by about 26%. That is: more sellers, fewer buyers - a parameter that shifts bargaining power to the buyer's side for the first time in years.

In terms of prices, the situation is still positive:

• Average price in Sofia: ~€2,300/sq.m. (early 2026); new apartments: ~€2,487/sq.m.
• Premium neighborhoods (Oborishte and others): €4,000+/sq.m.
• Annual rise in Sofia: ~€500/sq.m. in the past year
• 2026 forecast: 6%-10% (compared with 15%-18% in 2025)

What the euro entry really changed

Beyond sentiment, there are structural changes that will bear fruit in the medium term. The mortgage interest rate in Bulgaria, 2.6%-4%, remains among the lowest in the European Union, and with the currency anchored to the ECB, Bulgarian borrowers enjoy a financing certainty that did not exist in the lev era. Almost 90% of properties in Sofia are already priced directly in euros today, a shift that reduces friction for foreign buyers and eliminates exchange-rate risk.

According to forecasts of the European Commission and the IMF, Bulgaria's economic growth in 2026 will stand at 2.7%-2.8%, lower than the original forecast (3.1%), but still among the strongest in the Union. The pressure factor: inflation ranging between 2.9% (the Commission) and 3.8% (IMF), which limits growth in real purchasing power.

Who leads, who is left behind

Not all properties are going in the same direction. New apartments with a high energy rating in Sofia, Varna and Plovdiv lead the market - buyers are willing to pay a premium to avoid renovation. By contrast, Soviet-era apartments in the suburbs, without access to the metro, are beginning to suffer from weak demand - especially when there are more new-build alternatives within reach.

Portugal

Q1/2026 - apartment prices rose 12% a year, rents fell 1.2%

The Idealista property price index for the first quarter of 2026 shows a 12% rise in sale prices in the 12 months ending March 2026, alongside a 1.2% decline in rents over the same period.

Fitch Ratings forecasts a further 15% rise in prices for the whole of 2026, after the 18% rise recorded in 2025. The reasoning: a structural supply shortage that is not being resolved, foreign demand that continues without signs of slowing, and credit constraints that limit new development. The government acknowledges the depth of the problem and is advancing policy to encourage long-term rental, including a reduction of income tax to 10% on rental income at a moderate price, but the supply effect will take years.

The gross yield on rental in Portugal has fallen in sequence: from 7.3% in the first quarter of 2024, to 7.2% in Q1 2025, and now to 6.3% in Q1 2026. A decline of 1% within two years. When it is a single figure, one can dismiss it as noise. When it is a consistent direction, it is a structural trend.

The reason is not mysterious: the buying market is kept hot by foreign demand that does not respond to local rental factors. The average Portuguese continues to struggle to pay rent, and therefore is in no hurry to pay more. The international buyer, by contrast, is relatively indifferent to the 1.2% drop in yield.

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

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