More than double compared to the rest of the EU. is the percentage of real estate acquired in Greece, with the sole aim of utilizing them as short term rental accommodation. According to relevant research by European Commission in its various countries EU.it appears that 41.5% of the properties posted on short-term rental platforms have been acquired precisely for this purpose, i.e. to utilize investment.
This percentage is distributed to 30.2% among those who have at least two properties under their control and to 11.3% for those who have one property. The corresponding percentages in the E.U. they do not exceed 5.7% and 12.8%, i.e. they do not cumulatively exceed 18.5%. This fact, according to its latest weekly bulletin of economic developments Alpha Bank“is consistent with the rise of foreign direct investment in real estate in Greece and is one of the factors of increasing demand”.
As it becomes evident, the Greek real estate market attracted a large percentage of foreign investors, precisely because of the appeal of short-term rental and its success. The program for granting residence permits to citizens of third countries certainly played a role in the rise of foreign investments, which in 2022 reached 2 billion euros, marking an increase of 68% on an annual basis (compared to only 156 million euros in 2013). golden visa”. As reported by Alpha Bank, in the areas where intense tourist activity is recorded, namely in Athens, Thessaloniki, Crete and the South Aegean, the number of short-term rental accommodation that had at least one evaluation, amounted to almost 43,000, while until 2016 it was less than 10,000 . At the same time, in 2022, the total number of registered properties on the platforms was significantly higher, approaching 73,000 in the above regions and over 100,000 nationwide.
According to Alpha Bank, in its study Center for Planning and Economic Research, it is pointed out that an additional effect of the short-term rental market in a country is that it may limit the supply of properties for long-term rental and lead to an increase in rents. However, the extent to which this will occur depends, among other factors, on the individual characteristics of the short-term rental market, e.g. whether all or part of the property is to be disposed of.
The corresponding percentage in the rest of the EU countries it stands at 18.5%, according to a Commission survey.
Investments in housing
Meanwhile, the real estate market in Greece is now registering strong momentum, which, according to Alpha Bank, will be maintained in the future. During this year’s first half, residential investments increased by an impressive 46.8% compared to last year, when the corresponding increase had not exceeded 16.4%. In addition, the construction output index increased by 16.8% year-on-year (from 22.8% in the first half of last year). As highlighted in the relevant analysis, the recovery of the real estate market, which began in 2018, coincides with the increase in both real estate investments and building permits.
Based on the data announced yesterday by ELSTAT, during this year’s first half private construction activity increased by 11.6% based on the number of building permits, by 15% based on surface area and by 15.9% based on volume. In June, 2,423 building permits were issued, corresponding to 495,334 sq.m. surface area and 2,350,370 cubic meters of volume, showing an increase of 11.9% in the number of building permits, a 9.6% increase in surface area and a 26.7% increase in volume, compared to the corresponding month of 2022.
The above figures are also reflected in the course of housing prices, which have completed seven consecutive quarters of double-digit growth. In the second quarter of this year, prices rose by 13.9% year-on-year, compared to a 15% increase in the first quarter. From the third quarter of 2017 to this year, home prices have risen by about 54%, but are still 11.4% short of their pre-crisis peak in the third quarter of 2008. In office and shop prices are also on the rise, registering an annual increase of 3.1% and 5.3% respectively in the second quarter. The increase in office and shop rents was 1.8% and 4.7% respectively.
