Although COVID-19 has impacted the Greek property investment landscape, Athens is still an attractive destination for property investment and development. This is backed by the fact that large-scale funds and developers have given their vote of confidence and are committed to investing in large-scale mixed use, commercial and logistics projects.

The Athenian property market was on a strong growth trajectory up until the global COVID-19 pandemic struck Greece in the early months of 2020. This growth was fuelled by foreign investors who acquired properties as part of the Golden Visa programme as well as international real estate funds that focused on strategic property investments for commercial, office and hotel development. As the tourism sector boomed in Athens pre-COVID-19, overseas and domestic small-scale investors also acquired properties and put them up on the Airbnb platform in order to complement the growing demand of tourist stays in the city.

The nationwide lockdown imposed in Greece as a means of combatting the COVID-19 pandemic affected all economic sectors including real estate. In 2020 the number of foreign real estate investors closing deals dwindled, while various investment funds froze their plans for developing hotels in Athens and the overseas demand for holiday homes in Greece fell.

In Greece, the lucrative Airbnb business model seemed to collapse seeing as tourism (both domestic and international) fell to very low levels. As a result, many Airbnb landlords decided to put their properties up for sale or back on the long-term rental market (albeit at quite inflated prices). Domestic demand for properties also slowed because of the market uncertainty that COVID-19 brought about.

In 2019, property prices in Athens increased by up to 11% in some neighborhoods – this growth flatlined once lockdown measures were introduced in March 2020 yet did not experience significant dips. This is attributed to the fact that landlords have been biding their time and waiting to see whether COVID-19 will have a short or long-term impact on the real estate market. If a swift bounce back is to occur, the natural growth of the property market is predicted to continue.

Image of Athenian coastline

Yet we believe that even though COVID-19 has undoubtedly impacted the property market, it has created the space for new trends to arise.

A key trend with strong potential in the post-pandemic landscape will be the development of green buildings and energy-efficient commercial and residential properties. This will be part of the wider shift towards resilient and climate-smart cities in a bid to tackle climate change and strengthen the capacity of cities and property markets to adapt to shocks and stresses in the years to come.

The main drivers of urban development and regeneration are predicted to be large property development groups and investment funds. These stakeholders, along with the help of public authorities, are keen to invest in flagship projects so as to create nodes of new infrastructure and regenerate the job market. In turn, a spill-over effect is expected to attract smaller-scale developers and create new business clusters.

Logistics centres, modern A-class offices and residential new builds in the southern and northern suburbs of the city will continue to grow seeing as property prices are also comparatively low for European standards. This is set to encourage overseas investments and strengthen the resiliency of these sub-sectors.

At Astydama, we have geared ourselves to face the post-pandemic era by developing a green project portfolio that contributes to local resilience and climate change mitigation. We believe that investors should play their part in making Athens and other Greek cities a healthier, safer, and cleaner place.

Drop us a message here to discuss investing in an energy efficient project.