Greek Real Estate: Foreign Direct Investment Barrage in 2021 – The Comparison with 2019

A deluge of foreign direct investment in the real estate market (real estate management and private real estate sales) was recorded in 2021, with the high performance of the industry continuing for the 4th consecutive year.

In particular, in 2021, foreign direct investment in real estate management amounted to 1.233 billion euros from 670 million euros in 2020, while private real estate sales amounted to 709.9 million euros compared to 423 million euros a year earlier.

Of course, in both real estate management and private real estate buying and selling, foreign direct investment in 2021 failed to surpass the 2019 record, the last year of normality before the pandemic. In total, foreign direct investment in real estate management and private real estate sales in 2019 amounted to 2.526 billion euros compared to 1.943 billion euros in 2021.

However, in the 4 years 2018-2021, foreign direct investments in real estate activities in Greece quadrupled on average compared to the four years 2014-2017.

In particular, according to the analysis of Eurobank,  total foreign direct investment from 410 million euros reached 1.733 billion euros or from 20% to 44%.

In total, foreign direct investment in 2021 amounted to 4.8 billion euros in current prices, an amount corresponding to 2.7% of nominal GDP, while in 2019, foreign direct investment in Greece was 2.4% of nominal GDP .

Rising prices

The increase of foreign direct investments in real estate activities in Greece is one of the factors explaining the rise in real estate prices. According to BoG data, the apartment price index in Greece remained on an upward trajectory for the fourth year in a row in 2021. In detail, it grew by 7.1% YoY from 4.5% YoY in 2020.

From the end of 2017 until 2021, the overall increase in the apartment price index was 22.2%. Nevertheless, it is 29.1% lower than the peak of 2008, before the debt crisis .

The prices of shops and offices also moved upwards, with the total increase compared to the end of 2016 for shops and 2015 for offices reaching 16.6% and 14.4% respectively in 2020 (-17.0 % for stores and -18.8% for offices compared to 2010). The last available data for store and office price indices is the 1st half of 2021 (data availability 1st half of 2010 – 1st half of 2021). The store price index increased by 1.4% YoY in the first half of 2021 (3.4% YoY in the first half of 2020) and the corresponding for offices by 1.4% YoY (2.1% YoY in the first half of 2020).