The ongoing conflict in the Middle East is expected to influence the property market in Greece, with energy costs emerging as a decisive factor in shaping future trends.
Civil engineer and board member of the Panhellenic Federation of Property Owners, Manos Kranidis, explained that the key issue is not whether the conflict will affect the market but how long the tensions will last.
According to Kranidis, a short period of instability lasting only a few months could push investors and private buyers to seek safer markets within the European Union. In such circumstances, Greece could function as an intermediate safe haven due to its geographic proximity to the Middle East and its relative political stability.
However, Kranidis warned that a prolonged conflict lasting more than a year would create a different environment. Higher inflation, rising economic costs, increased interest rates and slower growth would likely reduce domestic demand while making the property market more dependent on foreign buyers.
Energy costs reshape housing value
Energy expenses have already begun to influence property values more directly. In modern apartment buildings, electricity and heating costs can account for 25–35 per cent of total household expenses.
Kranidis noted that if energy prices rise by 30–40 per cent, the overall cost of living in a property would increase significantly. This development would affect both rental prices and investment returns.
As a result, energy-efficient properties are expected to gain even greater value because they reduce operational costs during periods of energy crisis. At the same time, higher energy prices increase transportation, production and import costs, which in turn raise the price of construction materials.
Investor psychology plays a crucial role
Beyond macroeconomic indicators, market psychology will also play a decisive role. During periods of geopolitical instability, investors typically adopt more cautious strategies and evaluate risks over longer time horizons.
Liquidity does not disappear in uncertain environments but instead flows selectively into areas that offer institutional stability, clear tax frameworks and predictable regulatory conditions.
Kranidis stressed that Greece must preserve these characteristics if it wants to remain an attractive investment destination.
Construction costs and supply pressures
The rise in energy prices is already affecting the construction sector. Key materials such as steel, aluminium, cement and transportation rely heavily on energy inputs.
Kranidis estimated that in a prolonged crisis, construction costs could increase by 20–40 per cent. Such increases would likely delay projects and reduce overall building activity.
Lower construction activity would also limit new housing supply. Even if domestic demand weakens, a shortage of new homes could keep property prices relatively high.
Foreign buyers dominate parts of the market
The Greek property market has become increasingly international in recent years. Approximately 40–50 per cent of home purchases in central Athens and major tourist regions involve foreign buyers, while in some resort areas the figure exceeds 60–70 per cent.
Foreign direct investment in real estate has surpassed €2 billion annually in recent years and has become a key driver behind rising property prices. In parts of the luxury housing segment, international buyers account for up to 80 per cent of demand.
If tensions in the Middle East escalate, demand from foreign investors could strengthen further as families and investors seek second homes within Europe for security and mobility reasons.
However, global uncertainty could also discourage investors from other markets, including the United States and several European countries affected by slowing global economic growth.
A multi-speed property market
Kranidis predicted that the most likely outcome would be a multi-speed property market, a trend that has already begun to emerge.
Greek buyers are likely to face higher borrowing costs and increased housing expenses. At the same time, strong international demand and limited supply may continue to support property prices.
If Greece avoids direct military involvement, Kranidis believes a Middle East crisis is more likely to reinforce the country’s role as an investment and residential refuge in the region rather than trigger a market downturn.
Nevertheless, the coming period is expected to bring differentiation rather than uniform trends. Markets with high-quality housing stock, modern infrastructure and strong international demand will likely prove more resilient, while areas with limited liquidity and weaker investment interest could face increased pressure.
