How Renovation Affects the Value of Real Estate – The Role of Greek and Foreign Investors
The Greek real estate market in 2024 is characterized by differing preferences between Greek and foreign buyers, which affects pricing and demand. Greeks prefer homes up to 120 square meters, with a price range of €400,000-450,000, while foreigners mainly focus on larger and more luxurious options. Areas such as the Saronic Gulf and Euboea are attracting strong investor interest, further boosting demand.
Price Evolution and Market Trends
Despite initial estimates of a possible decline, real estate prices remain stable or continue to rise in some areas, albeit at a slower pace. Limited supply of real estate combined with steady demand is keeping prices high.
In Athens, the cost per square meter ranges between €1,700 and €1,800, even in areas traditionally considered affordable, such as Patisia and Kypseli. As investment opportunities in the capital become scarcer, many buyers are turning to the suburbs, where prices are more competitive and there are more opportunities to capitalize on real estate.
The Importance of Renovation in Value Creation
Renovation is a key factor in increasing the value of a property, as buyers avoid properties that require significant repairs due to cost and complexity. A renovated property can increase its value by up to 20%, although renovation costs now exceed €1,000-1,200/sq.m. At the same time, the lack of skilled labor and time-consuming procedures are challenges for those wishing to invest in properties that require extensive work.
Regulatory Interventions and Market Developments
An important factor that could strengthen the market is the sale of properties owned by banks, which are in the process of legal settlement. Their entry into the market could increase supply and help stabilize prices. At the same time, programs such as “My Home II” aim to boost demand for smaller and medium-sized homes.
The real estate market continues to be affected by urban planning issues and legal procedures, with several experts suggesting the creation of a single real estate management body to coordinate the competent authorities and speed up the settlement procedures. At the same time, differing dynamics across regions are creating two-speed markets, with variations in property values, which may affect market liquidity.
The Dominance of Cash Transactions and Demographic Trends
A characteristic feature of the Greek real estate market is the increased preference for cash purchases, with approximately 80% of transactions taking place without bank loans. This differentiates the current market from the pre-crisis period, when the majority of purchases were based on lending.
Greek buyers fall into two basic categories:
- Aged 40-45, financing their purchase through personal savings and family support.
- Ages 55-60 years old, who use inheritances or savings to the acquisition of vacation homes or investment properties.
Market Trends and Outlook
The Greek real estate market remains dynamic, with investment activity concentrated in the periphery, while prices in large urban centers remain high. An increase in property supply, the resolution of legal and urban planning issues, and the promotion of renovations could help stabilize the market.
According to experts, in order to maintain market sustainability, it is essential that prices remain at reasonable levels, allowing for the smooth flow of transactions. Cooperation with brokers and appraisers is considered crucial to ensuring fair and transparent sales.