Foreign direct investment (FDI) in Greece has found a crucial lifeline in the real estate market, with property acquisitions driving more than half of total foreign investments this year, according to the latest data from the Bank of Greece (BoG). Of the €2.1 billion in FDI inflows during the first half of 2024, 54.2%—or €1.14 billion—was directed towards real estate purchases, primarily for residential properties.
This marks a new high for real estate-driven foreign investments, continuing a trend that began in early 2023. In the first quarter of this year alone, €520 million flowed into the real estate sector, representing 43.3% of total FDI, which stood at €1.2 billion. By the second quarter, real estate investments surged to €622 million, while total foreign investments in the broader economy remained just under €900 million.
This pattern underscores the growing importance of the Greek property market as a key driver of foreign investment, at a time when overall FDI has been on a downward trajectory. In 2023, foreign investment in Greece fell by 38.7%, dropping from €7.5 billion in 2022 to €4.6 billion. Of this total, €2.1 billion—or 47%—was linked to real estate acquisitions, reflecting the sector’s outsized contribution amidst declining overall investment.
However, the future of real estate-driven FDI in Greece is facing headwinds. Real estate experts warn that recent government measures, including a ban on new short-term rental accommodations in central Athens and tighter restrictions on property purchases through the Golden Visa program, could significantly dampen foreign buying interest. These regulations aim to curb rising property prices and protect local housing markets but may reduce Greece’s attractiveness as an investment destination for international buyers, further impacting FDI inflows.
Despite these challenges, there is cautious optimism about the potential for a rebound in foreign investment. Factors such as a potential easing of European Central Bank monetary policy, declining inflation, and improving macroeconomic conditions globally could rekindle interest in Greek real estate and broader economic investments.
With the real estate sector playing such a pivotal role in Greece’s foreign investment landscape, any shifts in property market trends or policy decisions will likely have a pronounced impact on the country’s FDI performance. As Greece continues to recover from the effects of the pandemic and previous economic crises, maintaining investor confidence—both in property and the wider economy—will be key to sustaining its growth trajectory.
