Athens has become one of the hottest real estate markets in Europe, with apartments both in its degraded industrial areas and along its coastline.
According to Bloomberg, house prices in the Greek capital rose by 12,2% in October, with an increase three times that of Stockholm, while at the same time prices in Paris fell.
This rise is partly due to the long and slow impact of the Greek debt crisis.
Hundreds of thousands of homes are caught up in legal proceedings, reducing supply on the market and driving up prices in Athens faster than any other major European city.
While the end of the era of cheap money has hit purchasing power across Europe, homelessness is gaining the upper hand in more cities.
London, Paris and Berlin recorded year-on-year declines according to the latest monthly figures, while sales growth was recorded in Milan, Madrid and Stockholm with increases of more than 3%.
Greece’s decade-long debt crisis left lenders with 107 billion euros of burdened debt in 2016. Since then, banks have sold bad loans, tied to real estate mortgages. Although homes may end up at auctions, there is intense pressure on the available housing sector.
“There are no properties on the market,” said Lefteris Potamianos, president of the Athens-Attica Real Estate Association, who also attributed the rise in prices to demand fueled by the Golden Visa program.
In addition to the shortage, the economy is recovering and providing consumers with more purchasing power. Greece is projected to grow faster than the rest of the European Union this year, and GDP appears to be returning to pre-crisis levels in 2009.
The momentum has turned areas like Ghazi — an aging industrial complex — into a sought-after neighborhood. With limited living space, former warehouses have been converted into lofts around Technopolis – an old gas plant turned industrial museum and exhibition space.
In other parts of Athens, such as the upscale suburb of Glyfada, luxury complexes are attracting wealthy investors from abroad, especially from China. At last, the works also begin in Elliniko. The €8 billion redevelopment of the city’s old airport – Greece’s largest construction project – will include around 10,000 luxury beachfront homes and apartments after the first phase is completed in 2026.
Bloomberg notes that housing costs rose by more than a third of Greek household disposable income last year, compared to an EU-wide average of 20%. Prices in the Greek housing market are expected to continue rising, despite uncertainties in the domestic and global economy, Greece’s central bank said in its financial stability report earlier this month.