Foreign investment in the Greek real estate market declines

The Greek real estate market has been sluggish in recent months for a number of reasons, as reflected in the Bank of Greece's data on foreign direct investment in real estate.

After five years of continuous growth in investment by foreign nationals, data from the Bank of Greece for the first half of 2025 shows a dramatic decline of 17.8% compared to the same period last year (€938.3 million compared to €1,142.1 million).

Report on the Greek real estate market by the Greek-American Chamber of Commerce

"Despite its momentum, the real estate market in Greece is called upon to balance growth prospects and challenges such as cost and availability," notes Lefteris Sikalis, Chairman of the Real Estate & Development Committee of the Greek-American Chamber of Commerce, on the occasion of the conclusions of a relevant report published by the Chamber: "Greece: Real Estate Market Outlook 2017." Development Committee of the American-Hellenic Chamber of Commerce, Lefteris Sikaldis, commenting on the conclusions of a related report published by the Chamber: "Greece Property Market Outlook: H1 2025 & 6-Month Forecast."

As specifically noted in the report by the Greek-American Chamber of Commerce, "the Greek real estate market performed positively in the hotel, residential, and secondary holiday home sectors. However, residential prices are considered overvalued and industrial properties have recorded a decline in value. The main drivers of growth were strong demand from foreign investors for residential properties, the rise in tourism and the redevelopment of urban areas. Nevertheless, legislative uncertainty, rising construction costs, and difficulties in finding affordable housing continue to pose significant challenges.

Building regulations continue to affect permit approvals and activity in the construction sector, heightening market uncertainty. At the same time, attracting new institutional international investors and facilitating large acquisitions through lower capital costs remain critical.

The same publication concludes as follows: "Although the market appears generally resilient, there are already early signs of pressure in certain property categories. Over the next six months, hotels, vacation homes, and offices are expected to perform well, while industrial space, retail stores, and short-term rental properties are likely to lag behind."

The Greek-American Chamber of Commerce has compiled a detailed list of factors that will influence the real estate market in the second half of 2025, as follows:

On the positive side, it mentions, among other things, strong political and economic stability that boosts market confidence, lower interest rates and improved access to capital, significant market liquidity, ongoing support programs, reforms and investment incentives, the promotion of major development projects that strengthen long-term confidence, and continued tourism growth that supports real estate demand.

Among the challenges, it notes international economic and geopolitical uncertainty, high construction costs and ongoing inflationary pressures, labor shortages, particularly of skilled construction workers, legal uncertainty surrounding NOK provisions, bureaucratic inefficiencies and design delays that undermine investor confidence, a decline in foreign direct investment due to regulatory unpredictability and increased competition from alternative markets with more secure legal frameworks.