The residential real estate market is entering a phase of gradual maturation, with the cycle of sharp growth seen in recent years now showing clear signs of deceleration. As Yiannis Xylas, CEO of Geoaxis Property & Valuation Services, points out to BnBNews.gr, no “cataclysmic” shift in prices is on the horizon; rather, a smoother transition toward new levels of equilibrium is occurring within a normal market cycle.
While prices continue to move upward, the rate of increase is noticeably slowing, indicating that the market is approaching a turning point. The intense momentum of the previous period is gradually giving way to more moderate changes, without, however, reversing the overall long-term upward trend.
Towards stabilization and mild correction
According to the same analysis, the coming period is expected to lead to a price stabilization phase and potentially a mild correction. Mr. Xylas estimates that this picture will become clearer over the next 12 to 24 months, clarifying however that there is no risk of a market collapse or the creation of a “bubble.”
As he explains, the trajectory of real estate prices historically follows a “spiral” logic: each cycle concludes at higher levels than the previous one. Even during correction periods, the bottom remains higher than the low point of the previous cycle—unless extreme events occur, such as the 2008 financial crisis, which led to a drastic decline in values.
The lag in Northern Suburbs and recovery opportunities
Price evolution is not uniform across the market, as it is determined by specific characteristics such as location, age, construction quality, and accessibility.
Special mention is made of Athens’ northern suburbs, which, according to Mr. Xylas, have lagged behind the southern suburbs where prices recorded impressive gains over the last decade. This lag is attributed to lower investment interest, as well as issues regarding connectivity and the age of the housing stock. However, precisely because of this underperformance, the northern suburbs show potential for a stronger recovery, with the estimated price correction expected to be milder compared to other regions.
The problem is supply, not demand
The imbalance between supply and demand remains crucial for the market’s course. Mr. Xylas emphasizes that the fundamental problem of the Greek housing market is not a lack of demand, but the limited availability of homes.
Current approaches, which focus mainly on boosting demand through subsidies or tax incentives, are insufficient to curb prices, as they further increase pressure on an already restricted market. Instead, structural interventions are required, such as promoting mass construction, utilizing public land, and ensuring the active participation of the state and local government in creating an adequate housing stock.
How construction costs impact new-build prices
Simultaneously, international developments and energy uncertainty remain critical factors. Mr. Xylas notes that the duration and intensity of geopolitical conflicts directly affect energy costs, which in turn impact logistics and building materials.
Already, construction costs, which had shown a temporary retreat recently, are trending upward again. In an environment where the cost of producing new housing is rising, the likelihood of a significant price de-escalation remains limited, even if demand slows down.
Why a real estate “bubble” is not expected
Overall, the picture described is that of a market that is not overheating but undergoing a natural transition toward new levels of equilibrium. The sharp increases of previous years are subsiding, giving way to milder fluctuations, while differentiation by region and property category is expected to intensify.
the coming period will be decisive for the formation of a new balance in the housing market, with the focus shifting toward the need to bolster supply and the formulation of a more cohesive housing policy capable of meeting real market needs.
