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After two tough years since the outbreak of the pandemic, a period of uncertainty and instability for the real estate market, we are entering a new period with many signs of recovery and optimism.

Abstracting the information from Spitogatos real estate platform, we have worth noting data for the price trends in the market of Chania.

Below are the relevant charts, which depict the percentage change observed in the prices of properties for sale between the last quarter of 2020 to the perspective quarter of 2021. The breakdown by area and type of property help to better understand the corresponding price trends.

Regarding the apartments, a rising trend in prices is noticed. Specifically, a rise in the prices occurs in the tourist regions of Platanias and Kissamos and the urban regions of Chania like the center and Souda. The only exception is Akrotiri, where it seems there is a slight drop in the prices.

There seem to be significant fluctuations in the regions of interest regarding the detached houses. Still, the overall picture shows a slight rise in prices in the prefecture of Chania. More specifically, there was a rise in the regions of Center of Chania, Kissamos, and Kryonerida. On the contrary, a drop in prices was observed in Akrotiri, Platanias, and Souda.

Concerning the luxury residences and villas, more intense fluctuations are observed. As a total in Chania prefecture in this type of real estate is noticed a rise in prices. These properties in the regions of the Center and Platanias present a significant decline, whereas, in Akrotiri, the prices seem to level. The areas of Souda and Kissamos have a sharp increase in prices.

Finally, in terms of plots, prices are rising sharply in Akrotiri, Kryonerida, Souda and slightly in Platanias, while in Chania center and Kissamos there is a minor decline.

According to the Bank of Greece and the data published in the Interim Report for the Monetary Policy (December of 2021), there is an expectation for a remarkable rise in the growth rates of the Greek real estate housing market within 2022.

Moreover, it is a positive omen that the Greek economy seems to be recovering, which boosts the climate of optimism. More specifically, based on the data presented in the Press Release of the Quarterly National Accounts of the Hellenic Statistical Authority (December 6th of 2021), in the third quarter of 2021, the GDP of the country increased by 2.7% compared to the second quarter of 2021, while compared to the third quarter of 2020 there is a considerable growth by 13.4%.

Below is a detailed presentation of some indexes that the Bank of Greece presents, which reflect the optimistic forecast for the outlook of the housing real estate market in 2021 and set solid foundations for an equally busy year in 2022.

First of all, in the nine months of 2021, the investments in residences recorded an annual growth rate of 34.7%, in contrast to the same period of 2020 when the annual growth rate reached 19.3%. In addition, in the first eight months of 2021, the housing construction activity presents significantly yearly high growth rates of both in the number and the volume of the issuance of new building permits, reaching the rate of 48.9% and 57.7%, respectively. Also noteworthy is that despite the limited number of permits issued under the program of the Golden Visa, the interest from foreign investors in the nine months of 2021 increased by 34.7%, in contrast to the sharp reduction of 42.5% in the respective period of 2020.

The current picture of the local and the country-wide real estate market in conjunction with the indexes mentioned above justifiably creates the expectation for further development and activity in the sector. After many years of the declining economy due to the economic crisis in Greece, the conditions favor the real estate market. Except for the economy and the tourist sector recovery after the pandemic, serious efforts are made to mitigate bureaucracy in the real estate sector.

However, we shouldn’t forget many imponderable factors affected by the pandemic, like the smooth operation of the logistic chains and the hike in energy prices. As a result, we observe a rise in the cost of raw materials in the construction sector. These factors affect to a great extent the potential of the construction development and, as a consequence, the yields of the invested capital in real estate.

What is certain is that a good year is ahead for the real estate market in Chania.

Michael Haralampakis

Economist, Athens University of Economics and Business