Real estate contributes to the Greek economy’s positive momentum.

According to experts, Greece’s economy will continue to grow this year, albeit at a slower pace than previously anticipated, thanks to a strong tourism season forecast for this summer and investment activity in areas such as real estate.

According to an annual report prepared by Bank of Greece governor Yiannis Stournaras, high energy costs and uncertainty in the global environment caused by the Ukraine war have resulted in a reduction in the growth forecast for 2022, though expansion is still expected to hit 3.8 percent on an annual basis.

In a negative scenario prepared by the bank, if the adverse conditions persist for a longer period of time, growth could reach 2.8 percent.

The lifting of various pandemic-related restrictions, both domestic and international; the start of investment projects under the EU’s National Recovery and Resilience Plan; rising employment; accumulated savings; and continued export growth are all contributing to the Greek economy’s steady growth path.

“The Greek economy is showing remarkable resilience, flexibility and dynamism, despite uncertainty due to the recurring waves of the pandemic, but also to the new challenges associated with the Russian invasion of Ukraine,“ said governor Mr Stournaras.

“The high GDP growth rate in 2021 and the expectation of continued growth in 2022, along with the positive long-term economic outlook, have contributed to the recent upgrade of Greece’s credit rating to just one notch short of investment grade,” he added.

According to a recent report by credit ratings agency Moody’s, Greece’s limited direct exposure to Ukraine and Russia, which amounts to only 2% of GDP, is helping the economy. Russia accounts for only about 2% of Greek tourist arrivals and travel receipts, while Greek exports to Russia and Ukraine account for only 1%.

S&P upgraded Greece’s rating from ‘BB’ to ‘BB+,’ with a positive outlook, noting that the decision “reflects our expectation of a continuous improvement in Greece’s policy effectiveness, while the fallout from the Ukraine war appears manageable in light of significant buffers in both the private and public sectors.”

Real estate stays strong

Greece’s property sector is one of the areas that has performed well this year. Foreign and local buyers’ investor sentiment in housing remains strong, keeping demand for houses for sale on the Greek islands and the mainland robust.

According to the Bank of Greece report, “the promotion of legislative changes that simplify transfers, investment, and real estate development processes could provide significant market support and help maintain its current momentum.”

Recent legislative changes include the addition of more online services to help reduce red tape, the development of the National Cadastre to better protect property owners’ rights, and reductions to the ENFIA property tax.

At the same time, bank lending to home buyers has increased, supporting price growth in homes and apartments.

Prices in Greece, however, remain significantly lower than in the rest of Europe, attracting foreign buyers looking for beachfront properties in areas such as Crete and the Ionian Sea region, which includes Corfu, Zakynthos, Lefkas, and Syvota on the mainland.

According to the most recent data, foreign investors spent 1.17 billion euros in 2021 on buying a Greek home, a 34 percent increase from the previous year, as the market largely recovers to pre-pandemic levels.