Developments in the Middle East are directly and indirectly impacting the domestic real estate market, creating new conditions in an environment that was already in a transitional phase. Rising energy costs, uncertainty in international markets, and shifts in buyer sentiment are shaping a new landscape for the construction sector.
The Market Before the Crisis
Before the onset of geopolitical tensions, the real estate market in Greece had begun to stabilize after a prolonged period of strong growth.
- Construction costs had started to normalize following significant increases over the past five years.
- Demand had begun to slow from late 2025, mainly among Greek buyers, while increased construction activity helped contain price growth.
- Foreign buyers and the luxury housing market had matured, with investors becoming more informed, selective, and negotiation-driven. At the same time, interest began shifting toward competitive areas such as Asprovalta and Halkidiki.
New Conditions Due to the Crisis
Recent geopolitical developments are now influencing the market, creating a climate of caution.
1. Slower Decision-Making
Some buyers are becoming more hesitant. Uncertainty is leading to delays in decision-making, with developments largely depending on how long the crisis lasts.
2. Concerns About Interest Rates
For Greek buyers relying on mortgage loans, the possibility of rising interest rates is causing concern. In recent years, rising rents pushed many toward homeownership through borrowing. A potential rate increase could reverse this trend.
3. Pressure on Construction Costs
Energy costs are a critical factor for the construction sector. While no significant increases in material costs have yet been recorded due to the crisis, they are likely if tensions persist. This would lead to higher prices for newly built properties.
Market Data Based on Trends
According to available market data:
- In 2025, housing prices increased by 7.8%
- In 2024, by 9.1%
- Overall, since 2017, the increase is 87%
- In second-hand properties older than five years, prices remain relatively stable
Increased construction activity has helped limit price growth. However, a new rise in energy costs could disrupt this balance.
The Lesson from the Post-COVID Era
During the post-pandemic period, many developers proceeded with pre-sales at prices agreed upon before the sharp rise in material costs. This resulted in significant pressure on their profit margins.
As a result, developers have become more cautious, avoiding similar risks in the future.
A characteristic example of the market’s dynamics is an apartment purchased for €100,000 and resold just three months later for €135,000, without ever being occupied.
The Role of Foreign Buyers
Purchases from abroad are expected to continue, although there is already a noticeable shift in interest toward areas such as Thassos and Halkidiki. Importantly, foreign buyers do not directly compete with Greek buyers, as they target different types of properties and investment criteria.
Crisis and Opportunities
Every crisis creates both challenges and opportunities. Greece is not directly involved in the conflict, meaning the effects will mainly be indirect and delayed.
Most construction materials are priced on international markets and are influenced by geopolitical developments. In the long term, both the conflict in the Middle East and the war in Ukraine may lead to price increases.
Even in the case of de-escalation, reconstruction needs in affected areas will increase demand for raw materials, further intensifying price pressures.
Conclusion
The real estate market is at a critical point of balance. The recent stabilization could be overturned by external factors, primarily energy costs.
For prospective buyers, the current period may present an opportunity, as prices remain relatively stable. However, the evolution of the geopolitical situation will largely determine the market’s direction in the near future.