By Madeleine Pollard
“Athens is coming back from the dead,” says Savvas Savvaidis, president and chief executive of Greece Sotheby’s International Realty. This is a fitting sentiment for a city that has risen to glorious heights and fallen to defeat numerous times in its 5,000-year history.
The “death” in question is Greece’s 2009 financial crisis, which caused the economy to shrink by 27 per cent from a gross domestic product of €242bn in 2008 to €176bn in 2015, according to Elstat, the Greek statistics agency.
Residential property transactions across the country fell by more than 70 per cent over the same period, and the government implemented austerity measures to combat a debt pile of 180 per cent of GDP, shaking the capital with civil unrest.
Now, a surge of foreign investors is breathing new life into Athens’ housing market. Estate agent Knight Frank reported annual price growth of 11.2 per cent in the second quarter of 2019, elevating the capital to the top 10 of its Global Residential Cities Index in terms of growth.
That said, house prices are still below their pre-crisis level.
The city’s historic charm and Mediterranean climate are obvious draws for international buyers. “Athens combines the Greek flair — the style of the people, our hospitality, our vibrancy — with easy proximity to a very good natural environment outside the city,” says Danae Tsakiris, an associate director with estate agent Savills in Athens.
The uptick in sales has been accelerated by Greece’s golden visa scheme. Implemented in 2013 to boost economic growth, the scheme grants residency permits to non-EU nationals, and their families, who purchase property of a value exceeding €250,000. Of 5,302 permits issued to investors to date, 3,464 have been claimed by Chinese buyers, followed by buyers from Turkey, Russia and Egypt.
Most are flocking to central neighbourhoods such as Kolonaki and Plaka, where prices for prime apartments start at €4,000 per sq m and can rise to €8,000 for views of the Acropolis, the ancient citadel that towers above the city. In the prestigious Presidential Palace district, apartments can reach €12,000 per sq m but are still half the price of high-end neighbourhoods in Milan, Paris or London, Savvaidis notes.
As more than half of foreign purchases have been geared towards buy-to-let, according to Savills, Athens has been subject to the Airbnb boom. “Athens is sunny, very laid-back and does have a bit of an undiscovered ‘edge’ that young people are after,” says Spyros Rennt, a photographer living between his native Athens and Berlin, of its growing appeal to creatives.
“But with Airbnb running rampant, low-income families, immigrants and students are struggling to find places to rent and are constantly being displaced to suburbs further away.”
The growth in investor appetite has led to limited stock in the city centre, reports Savills. However, Athens’ historic heart is not the only area receiving attention: a flurry of coastline developments have been transforming the so-called Athens Riviera — about 16km from central Athens, stretching from the southern suburbs to the southernmost point of Attica — in an attempt to orientate urban life towards the sea.
Piraeus Port is one of the largest commercial harbours in Europe, but the construction of a seafront highway in the 1960s created a barrier to the beach. The €8bn Hellinikon Project, due for completion within the next five years, aims to change that.
Built on the site of the former airport, the 620-hectare project spans 3.5km of coastline, constituting a “new municipality” in terms of size, according to Tsakiris. It will feature a 200-hectare park — the largest coastal park in Europe — retail and business districts, and homes for 22,000 people.
Hellinikon follows the completion of the Renzo Piano-designed Stavros Niarchos Cultural Center in Faliro Bay in 2016, including new facilities for the National Library of Greece and the Greek National Opera.
In light of these developments, and proposals by Greece’s new prime minister, Kyriakos Mitsotakis, to cut corporation tax from 28 per cent to 24 per cent next year, Savvaidis is optimistic about continued growth in property prices.
“All the macroeconomics are heading in the right direction,” he says. “We are at the start of the recovery of our property market, without even considering the impact of the Greek banking system doing its job, which is lending to the people.”