Foreigners cool off on property investments

The contribution of foreign investment in real estate to total foreign direct investment in the Greek economy has decreased significantly this year.

According to data from the balance of payments compiled by the Bank of Greece, during the first half of this year, total foreign investment in the economy amounted to 2.8 billion euros. Of this, €938.3 million or 33.4% concerned investments in real estate.

Although still high, this year’s share of real estate is almost half (-42.2%) of that of the corresponding half of last year. At that time, it had reached 57.8%, as real estate had attracted foreign investment of €1.14 billion, out of a total of €1.974 billion, which was the total foreign direct investment in the country’s economy. In fact, according to the data obtained in the third quarter, total foreign investment in the economy jumped to €8.6 billion, which means that the contribution of real estate will be even lower, given that the increase will not be proportional.

Already, there was a 17.6% annual drop in the first half of the year. In the first quarter a 31.6% drop was observed, to €356.8 million, while in the second quarter the drop was limited to 6.5% and €581.5 million (from €622 million).

According to real estate sources, it seems the investment of capital from abroad in real estate in Greece has begun to change characteristics, as it moves from a more speculative nature to a more long-term orientation. There is also a significant increase in demand for holiday homes and luxury properties.

On the other hand, investments that were exclusively related to securing a residence permit or the exploitation of real estate through short-term leases, although they continue to exist, have begun to return to a more normal level compared to the past two years, when the restrictions that were introduced (especially in 2024) caused an investment frenzy in order to secure real estate on the part of foreigners. Already this year up until October, 12% fewer applications were submitted for a permanent investor permit.

Source: eKathimerini.com