The new regulations linked to the increase in the Golden Visa acquisition limits and short-term leases as well as the ceiling of the Bank of Greece in the granting of housing loans change the current data in the real estate market. How will they affect her and in what way? More generally, what are the estimates for the course of residential real estate prices? APE-MPE posed these questions to prominent market players.
The Ministry of National Economy and Finance announced the legislation to increase the limits for the Golden Visa with the aim of addressing the housing problem – by limiting demand in “fillet” areas – and addressing the distortions in the real estate market, by reducing particularly high prices.
At the same time, it is proceeding with the establishment of three-speed limits depending on the geographical location in which a property is located, as well as special treatment for those who invest in listed buildings. Without, as he estimates, losing the incentives for the introduction of investment capital into the country and the development of the real estate market.
The evolution of the real estate market
As the managing director of the New Deal Real Estate Group, Christos Bletas points out on the occasion of a survey by the Real Estate Academy of the Group, on the development of the real estate market in the next 12 months, the majority of participants, owners, interested buyers and real estate consultants, are optimistic about the course of the real estate market and the time it takes to sell a property. While they consider it reasonable to discount up to 10% from the original price during negotiation.
According to the findings, there is a general optimism about rising house prices, with a combined 37.9% of respondents predicting a slight increase and 23.8% predicting a significant increase. This shows that the majority of respondents have a positive view of the market direction. However, there is also a share, with a significant proportion (15.7%) believing that prices will remain stable.
Regarding the percentage of discount that is considered reasonable, 38.6% consider a percentage of 6-10%, while 34.5% prefer an even smaller discount of 1-5%. This shows that most appreciate that the market has been shaped in such a way that it allows the owners not to drop the prices they do not want low in order to sell, but also not to lose from the value of their property.
Finally, regarding the time it will take to sell a property, results vary. The largest group, at 28.3%, expects the sale to take 3-6 months, while significant percentages also see the sale occurring within 1-3 months (23.8%) or 6-12 months (23.5 %). This shows a certain optimism for the rapid sale, but also a reality that a major real estate market remains difficult to predict accurately. While some are optimistic about a quick sale, others are preparing for a long process, showing the wide range of opinions and expectations in the current real estate market.
“What the recent research shows is that many people are optimistic about what will happen in the near future with real estate. Even if there are some disturbances from unexpected events, it seems that the market is in good shape and that at least in the near future it will continue to do well and grow”, Mr. Bletas estimates.
To address the housing crisis, a shift towards a fairer and more sustainable development model is required
The managing director of the New Deal Real Estate Group, Christos Bletas, referring to the new arrangements for the Golden Visa and the short-term lease – in order to address, among other things, the housing issue – points out to APE/MPE that the problem we are facing is multidimensional and directly connected with the country’s development policy, which:
– It relies heavily on tourism, with many properties being converted into short-term rental accommodation via platforms such as Airbnb, causing a significant reduction in the availability of long-term rental housing, and
-. It seeks to attract foreign investors through programs such as the Golden Visa, which, despite making up just 7% of real estate transactions, has a disproportionate impact on the market due to its focus on specific, desirable areas.
Therefore, efforts to increase the thresholds and apply stricter conditions to the Golden Visa program, leading to its gradual abolition, are not expected to bring substantial solutions, but only to reduce public revenues and foreign investments that are likely to head to other markets.
As Mr. Bletas mentions, the explosion of interest in the tourism sector has led to unbalanced development, leaving behind other important economic sectors. A lack of investment in productive activities and an uneven distribution of wealth add to the problem as many citizens struggle to cope with the rising cost of living.
To address the housing crisis, a shift towards a fairer and more sustainable development model is required. Strengthening social housing policies and shifting investments to productive sectors are critical to ensuring everyone has access to decent housing, he adds.
The specific arrangements will have positive effects mainly on real estate sales in urban renewals
Referring to the new arrangements announced for the new increased amounts for obtaining the Golden Visa which reach 800,000 euros in certain geographical areas, Mr. Giannis Revythis, economist-real estate appraiser and honorary president of the Attica Real Estate Association, in his statements to APE/MPE, favors the views that estimate that the new regulations will freeze the number of residence permits and in general will not have any benefit for the real estate market. Freezing the Golden Visa market, a €10 billion market, will have direct and indirect significant negative effects on areas such as the State’s tax revenue from real estate transfers and will also negatively affect a number of real estate professions.
As he points out, foreign interested parties who have large sums to invest that exceed 800,000 euros do not directly depend on the acquisition of a property in order to obtain a residence permit, so there will not be an increased demand. The specific arrangements will have positive effects mainly on property sales in urban renewals that are underway as sales prices approach the new thresholds for obtaining the Golden Visa and will be driven to higher levels.
Referring to short-term leases (in the case of those who lease up to two properties) Mr. Revythis considers that it constitutes an important additional income for their owners who in most cases belong to the middle income classes and for this reason additional fees should not be established restrictive measures.
The problem of student housing or worker housing in tourist destinations will not be solved by restrictive measures on short-term rentals, as he argues, nor by increasing the Golden Visa investment limit, but by building student housing, such as in foreign countries as well as from the welfare of the state to build houses for the workers. In an era where the cost of living has risen and the middle class is facing major financial challenges, short-term rentals provide a respite for these classes. As Mr. Revythis points out, prices in the real estate market and in construction will continue their upward trend, with the result that they cannot be approached by new couples with medium incomes. The decline in energy costs, after the large increase that occurred, did not pass to the construction costs, which are still rising as speculation phenomena are observed. At the same time, land is being sold at high prices, while property taxes are high, mortgage rates are rising, creating difficult conditions for middle income earners.
“Golden Visa held down real estate prices”
The Golden Visa is not only not the cause of the increase in real estate prices and rents, but if it did not exist the prices would have increased much more, says Vangelis Kteniadis, president of the real estate development and management company V2 Development and vice president, to APE/MPE of the Greek-Chinese Development and Entrepreneurship Committee of the Athens Chamber of Commerce.
To date, 20,000 properties throughout the country have been allocated for obtaining the Golden Visa, says Mr. Kteniadis. 60% of these properties, i.e. 12,000 properties, were developed by developers, through developments of derelict buildings, buildings that were in beta or very old properties after radical renovation, and sold to investors. Only 8,000 properties were taken off the market, he says.
He also points out that because of the Golden Visa program, 4,000 properties were put on the market, without which house prices would have increased. Of the 20,000 properties made available through the Golden Visa program, only 6% were owner-occupied by investors, i.e. 1,200. If we subtract from the 4,000 properties the surplus created by the program, the 1,200 that were owner-occupied, then the sign remains positive for 2,800 properties . Mr. Kteniadis estimates that the very large number of properties that have passed to banks and management companies and are not available on the market, as well as the number of properties in short-term leases (183,000 properties in the Attica Basin) are the root cause of the housing crisis that it doesn’t let the prices go down but they keep going up and not the Golden Visa program.
The Bank of Greece puts a ceiling on the amount of mortgage loans
According to an act of the Executive Committee of the Bank of Greece from 1.1.2025, a maximum allowed limit is set for the debt service to income ratio, upon approval, as well as the loan to value ratio upon approval for new loans and other credits. Specifically, the cost of servicing the loan cannot exceed 50% of the borrower’s income, while the amount of the loan cannot exceed 90% of the value of the property.
According to the estimates of bank executives contacted by APE/MPE, the specific decision of the Bank of Greece does not change the current data in the housing credit sector and by extension the real estate market. Banks with the credit criteria they apply actually take into account the specific criteria. The decision is an additional institutional safety net in order for the banking system to remain shielded from future impacts from the possibility of a new generation of bad loans.
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