The Greek real estate market collapsed since 2009, mainly driven by the drop of GDP per capita, the shrinking of residential lending and the rise in taxation, dragging investments and house prices down.
Approximately €18bn., or 8.2% of GDP, investments in construction were lost within 2008-2015, slowing further down the economic activity.
The Greek housing market currently is an “outlier” of the European markets characterised by oversupply, demonstrating a 41% decline in house prices between 2008-2015, a 72% drop in transactions volume within 2008-2014, while real estate taxes have grown up by approximately 6 times (€ 3bn.) in the five-year period 2010-2015, further contributing the economic downturn.
According to a realistic scenario, where GDP per capita returns to pre-crisis levels in 2030, the real estate market will not contribute significantly to the growth of the Greek economy, and the c. € 14bn annual investment gap will have to be covered by other sectors of the economy.
For the fast recovery of the real estate market, a new regulatory framework, along with measures to facilitate transactions (Land Bank) and reduce oversupply (massive redevelopment) are needed.