The Greek property market has experienced a significant downturn in early 2025, with transaction volumes dropping sharply across major urban centers. This decline marks a notable shift from the recovery trajectory seen in previous years, as multiple economic factors converge to create challenging conditions for both buyers and sellers in the Hellenic real estate sector.
Greece Property Sales Plummet 15% in Early 2025
Property transactions across Greece have witnessed a dramatic 15% decline in the first quarter of 2025 compared to the same period in 2024. The latest data reveals that residential sales dropped from approximately 28,500 transactions in Q1 2024 to just 24,225 transactions in the corresponding period of 2025. This represents the steepest quarterly decline since the post-pandemic recovery began in 2021.
The commercial property sector has fared even worse, with transaction volumes falling by 22% year-over-year. Office spaces and retail properties have been particularly affected, with many potential buyers adopting a wait-and-see approach. The overall property market turnover decreased to €3.2 billion in Q1 2025, down from €3.8 billion in the previous year, signaling widespread caution among investors and homebuyers alike.
Rising Interest Rates Hit Greek Real Estate Hard
The European Central Bank’s monetary policy tightening has significantly impacted mortgage accessibility in Greece, with average interest rates climbing to 4.8% in early 2025 from 3.2% a year earlier. This 1.6 percentage point increase has effectively priced out many first-time buyers and reduced purchasing power for existing homeowners looking to upgrade. Greek banks have reported a 35% decrease in mortgage applications compared to the same period in 2024.
Variable rate mortgages, which account for approximately 70% of all home loans in Greece, have seen monthly payments increase by an average of €180-250 for typical properties. The combination of higher borrowing costs and stricter lending criteria has created a perfect storm that has cooled buyer enthusiasm. Many potential purchasers are now delaying their property decisions, hoping for more favorable financing conditions in the coming months.
Athens Housing Market Shows Steepest Decline
The Athens metropolitan area, traditionally the most active property market in Greece, has recorded the most significant drop in sales activity. Residential transactions in the capital fell by 18% in Q1 2025, with only 8,400 properties changing hands compared to 10,250 in the same period of 2024. The average property price in Athens has remained relatively stable at €2,150 per square meter, but the reduced transaction volume indicates weakening demand.
Specific neighborhoods have shown varying degrees of impact, with luxury areas like Kolonaki and Kifisia experiencing drops of up to 25% in sales volume. The rental market has also softened, with new listings increasing by 12% while rental prices have plateaued for the first time in three years. This shift suggests that some potential sellers are converting to rental properties rather than accepting lower sale prices in the current market conditions.
Foreign Buyers Retreat From Greek Properties
International property purchases in Greece have declined by 28% in early 2025, representing a significant retreat from the robust foreign investment seen in recent years. German and British buyers, who traditionally comprised the largest segment of foreign purchasers, reduced their acquisitions by 32% and 35% respectively. The total value of foreign property investments dropped to €420 million in Q1 2025, down from €585 million in the previous year.
The Greek Golden Visa program, which requires a minimum property investment of €500,000, has also seen reduced participation. Applications through the program decreased by 40% compared to Q1 2024, with only 285 new applications submitted versus 475 in the previous year. Currency fluctuations, combined with higher financing costs in buyers’ home countries, have made Greek properties less attractive to international investors seeking European residency through property acquisition.
Economic Uncertainty Dampens Investment Appetite
Broader economic concerns have contributed to the property market slowdown, with inflation remaining elevated at 3.4% and unemployment still above pre-crisis levels at 10.8%. Consumer confidence has weakened considerably, with the relevant index falling to 89.2 points in March 2025 from 94.7 points a year earlier. These macroeconomic headwinds have created a cautious atmosphere where discretionary spending on property has been postponed.
The construction sector has also felt the impact, with new building permits declining by 14% in the first quarter of 2025. This reduction in new supply might provide some support for prices in the medium term, but current market conditions suggest that developers are taking a more conservative approach to new projects. Industry analysts expect the market correction to continue through the second quarter of 2025, with potential stabilization dependent on interest rate trends and broader economic recovery.
The Greek property market’s sharp decline in 2025 reflects a combination of monetary policy changes, economic uncertainty, and shifting investor sentiment. While the current downturn presents challenges for sellers and the broader real estate industry, it may also create opportunities for well-positioned buyers in the coming months. Market watchers will be closely monitoring interest rate developments and economic indicators to gauge when conditions might stabilize and potentially reverse the current negative trend.
Join The Discussion