Good morning everyone,

This month's analysis (as you can tell from the title) comes after the last post on my blog regarding the real estate market situation, from which I received several emails/calls about whether it is the right time to invest in property in Greece.

It's definitely a concern that I am often asked to address, and it's perfectly reasonable. However, as I have mentioned many times, I do not have any hereditary gift that helps me, nor do I sympathize with astrological predictions. I always try to look at the data and reflect my analyses. I will do the same today, trying to provide some answers...

Before we see if it makes sense to invest in property during this period and how it should be done, let's see where the real estate market/economy stands:

• First, the economy/society in our country is trying to find its pace amidst an electoral period (basically since May, we have observed stagnation in consumption and investment), a summer with shocking natural disasters (long-lasting and impactful fires and floods, causing human casualties and significant environmental damage).

• Moreover, although the tourist season's initial signs are not as disappointing as I feared, there is a slight dissatisfaction prevailing or, to put it better, the enthusiasm and optimism that prevailed from 2019 to 2022 have decreased (with a break, of course, due to Covid).

• Inflation has now become noticeable at all levels of society, resulting in a squeeze on purchasing power.

• And here arises the legitimate question, is the economy psychology correct? So, do we not have the best ground to start, or maybe not?

  Every coin has two sides.

• Greece, and more specifically our economy, has faced high inflation in the past and resisted it.

• The health crisis, accompanied by quarantines and great uncertainty, feels like it belongs to the distant past, even though it has not been even 2.5 years.

• The same goes for the economic crisis, which was also the subject of discussion for a return to a national currency.

• Even the hostilities in European territory have been accepted by society.

  Seeing today's situation and the recent past, I will reiterate the expression by Carville, "It's the economy, stupid." The economy won't stop as long as the world turns; it will find solutions and move forward where it has targeted. The same goes for real estate, which we experience daily. According to an analysis by UPS (reminiscent of the IMF one I mentioned last month), it characterizes the real estate market as... a bubble (which brings back memories from the distant 2008). However, it is noteworthy that in the analysis, it does not mention or include Athens/Greece, although it identifies several risks in capitals where real estate had continuous growth (see Amsterdam and Madrid).

  So, what's happening with Athens or more broadly with the Greek Real Estate Market? In my opinion (I've mentioned this before), the cause must be sought in the lack of properties on the market, the application of the most basic rule of supply and demand. The demand is active from Greeks (who disregard high loan interest rates as most transactions occur without financing), foreigners for the Golden Visa, as well as investors who either see opportunities in tourism or generally in the real estate development sector.

  To have a more comprehensive picture, it suffices to read this article in the Kathimerini newspaper from 1997 to 2022, where we have seen almost a 74% decrease in new constructions for ease, see the chart:

  The numbers reflect the truth, but the way you interpret them is another story. As I mentioned, the demand is active, real estate agencies have visits and calls for purchase/rental, but there is also a problem of the absence of properties, either valuable or at a better price.

  Closing, logic and data reflect that there is still room for further increase in property values. The question I need to ask, in my turn, is what timeline is there for the investment?

  Κλείνοντας η λογική και τα δεδομένα αποτυπώνουν ότι υπάρχει ακόμα χώρος για περαιτέρω αύξηση των ζητούμενων αξιών των ακινήτων, η ερώτηση που πρέπει να θέσω και εγώ με τη σειρά μου είναι τι χρονοδιάγραμμα υπάρχει για την επένδυση?

  • If we are looking for a property for personal use, we may need to hurry as valuable properties are sold quite quickly.

  • If we are looking for an investment in a property with a 12-18 month time horizon, we should be very careful.

  • If we are looking for an investment in a property with a time horizon of 3 to 5 years, it might be a very good time.

  • Finally, for investments with a long-term horizon of 10 years, there are very interesting data, but it requires more analysis.

    As I mentioned, I lack (unfortunately) the hereditary gift, nor have I studied the astrological chart of the properties recently. However, we must accept that we do not know what the future holds, and that includes risk and return at the end of the day...

    Of course, I will not fail to present a property that caught my interest this month:

    A fully renovated (and energy-efficient) apartment in the Municipality of Nea Psychiko.

  • First floor, 80 sqm with two bedrooms.

  • Ideal for immediate rental with a potential yield of 7-8%.

  • Asking price: 240,000 euros (3,000 euros/sqm)

  • You can read all the details here.

Best regards,

Vasilis Asteriadis.