Last year was marked by persistent pressure on Greek real estate, with sales prices and rental values under pressure for both residential and commercial properties. In its most recent report on economic indicators, the Bank of Greece found that the main factors affecting the market’s recovery continue to be economic uncertainty, the imposition of capital controls since last summer, a shortage of liquidity and high unemployment. Continuous changes to the country’s tax system have also dogged investors and companies. The first signs of stabilization in the Greek real estate market that were shown since the end of 2014 have proven to be short-lived.
This includes investor interest which revived in the middle of 2014 but has since fallen away. At the same time, pressures to renegotiate and reduce rents continued, in particular for secondary retail, warehouses and non‐prime office buildings. However, the Bank of Greece points out that falling vacancy levels has boosted prime office and retail rents. In the first half of 2015 office rents rose by 0.5 percent compared with the second half of 2014. However, nominal retail prices fell by 4.4 percent nationwide, while rents declined by 1.8 percent. The market appears to be waiting to see how Greece’s creditors evaluate the situation and to see if the process of handling the wave of immigrants is handled effectively.
