Housing markets, the great crisis, and metropolitan gradients: Insights from Greece, 2000–2014

Abstract

Multifaceted social processes have shaped long-term economic dynamics in Europe with apparent spatial outcomes. The construction sector has been one of the industries with the most evident (crisis-driven) change in Greece, likely the most affected country in Europe. With the aim at providing a comprehensive knowledge of short-term dynamics in real estate local markets, the present study investigates spatial variations in the value of new dwellings at 54 Greek prefectures over sequential economic downturns (2000–2014). Supplemented with contextual indicators, an exploratory framework based on non-parametric correlations, multivariate statistics, and spatial regressions, was run to identify geographical patterns in the average dwelling value characteristic of economic expansion (2000–2007) and recession (2007–2014). The average value of new dwellings per surface area increased in a spatially heterogeneous fashion across Greece, with significant differences between the two time intervals. With economic expansion, the highest values of new dwellings were more likely observed in dynamic districts with agglomeration economies, upper socioeconomic functions, and transport accessibility. With recession, the spatial distribution of dwelling values was more heterogeneous and decoupled from the socioeconomic profile of local contexts, with the highest growth rate recorded in accessible rural districts and coastal areas - including islands. Spatial changes in the average dwelling value reflect the (evolving) geography of economic performance and wealth accumulation in Greece. A comprehensive investigation of the role of economic downturns shaping dwelling values over space provides the appropriate background to inform post-crisis development measures.