In a global environment of increasing geopolitical instability, the Greek property market is once again called to adapt to new conditions. The conflict in the Middle East, involving the US, Israel, and Iran, is already shaping a more uncertain economic landscape, impacting energy, operating costs, and international investor behavior. Although Greece is not at the center of military developments, the effects are indirectly transmitted to the economy and, by extension, to the real estate market.
Market executives point out that the Greek property market has shown significant resilience in recent years, maintaining upward momentum even through periods of intense international volatility. From 2020 to today, the market has continued to grow despite the major challenges posed by the pandemic, the 2022 war in Ukraine, the 2023 conflict in Gaza, and the subsequent energy crisis.
However, 2026 finds the Greek real estate market in a phase of readjustment. Construction activity is already showing signs of slowing down, and investors appear more cautious. According to ELSTAT data, for the eleven-month period of January–November 2025, there was a 20.6% drop in the number of new building permits nationwide—34,997 units compared to 44,090 in the same period of 2024. This trend is attributed to both the international economic slowdown and domestic factors, such as uncertainty surrounding the New Building Code in previous years.
The duration of the crisis will determine the impact on the Greek property market
The duration of the crisis and the scope of geopolitical tension will play a decisive role in the trajectory of the property market. In a scenario of short-term instability, Greece may even benefit, as many investors turn to safer markets within the European Union. The country’s political stability and its position within the European framework make it an attractive destination for residential or investment property purchases.
In a more prolonged crisis scenario, however, the picture becomes more complex. Rising inflation, sustained high interest rates, and slowing economic activity directly affect property demand. Higher borrowing costs limit household purchasing power while increasing the overall development cost of new projects.
Energy as a key pressure factor
The primary channel through which a Middle East conflict affects the Greek economy is energy. Approximately 20% of global oil trade passes through the Strait of Hormuz, making the region critical for the international energy market.
For Greece, a potential rise in oil and gas prices translates into increased electricity costs and business operating expenses. These impacts carry over to the real estate sector. Today, electricity, heating, and cooling expenses can account for 25% to 35% of a household’s total living costs. In a scenario where energy prices rise by 30%, the operating cost of a property increases significantly, affecting both owners and tenants.
Dependence on international demand
The Greek residential market now depends heavily on international demand. In recent years, approximately 40% to 50% of residential transactions in central Athens have been linked to foreign buyers, while in several tourist areas, this figure exceeds 60%. At the same time, Foreign Direct Investment (FDI) in real estate exceeds €2 billion annually, serving as a primary driver for price increases.
In the luxury housing market, the share of international buyers can reach 70% to 80% of demand. During periods of geopolitical tension, this interest may either wane as investors postpone decisions or strengthen if Greece is viewed as a safe investment haven compared to other regions.
Notably, countries such as Turkey, Lebanon, Iran, and Israel are now among those with an increasing number of applications and approvals for the “Golden Visa” investment residency program. Geopolitical uncertainty in the Middle East is leading more wealthy citizens from these countries to seek a safe investment refuge in Greece and, by extension, the European Union.
Construction costs and limited supply
At the same time, rising energy prices directly affect the construction sector. Materials such as steel, aluminum, and cement are highly dependent on energy and transport costs. Under prolonged crisis conditions, construction costs could rise significantly—by as much as 15% to 30%—limiting the development of new housing.
This development restricts market supply. Thus, even in the event of a slowdown in demand, the limited availability of new properties may act as a factor that keeps prices stable.
An environment of increased uncertainty
As market experts note, the tension in the Middle East affects the Greek economy primarily through energy, operating costs, and international capital flows. The real estate market is at the heart of these developments, impacted by both increased construction and operating costs and the behavior of foreign investors.
As long as Greece remains outside of direct military involvement, the country is expected to continue functioning as a relatively safe investment destination. However, rising property operating costs, the slowdown in construction activity, and general international uncertainty create a more complex and demanding environment for the Greek property market in the coming months.
