Foreign Direct Investment, Housing Prices and Affordability in Greece: An Empirical Assessment, 2015 – 2024

Abstract: Foreign direct investment (FDI) has increasingly shaped housing markets worldwide, yet empirical evidence for Greece remains limited. This study examines the impact of FDI on urban housing prices and national housing affordability in Greece between 2015 and 2024 using multivariate regression, incorporating residualisation and sensitivity analysis to address collinearity and assess statistical robustness. Results show that FDI inflows into real estate are a statistically discernible and significant inflator of housing prices, with robust and stable effects across model specifications, reinforcing ongoing affordability pressures. The analysis underscores the methodological importance of controlling for overlapping macroeconomic indicators, revealing effects that would otherwise remain partially obscured in unadjusted models. Policy implications include the need for targeted monitoring and regulation of FDI to mitigate housing affordability risks, while sustaining macroeconomic growth. Future research should expand on temporal coverage, incorporate emerging factors such as short-term rentals, and explore sub-national and cross-country dynamics. This study brings theory and empirical evidence together, highlighting FDI as a critical driver of contemporary market dynamics in Greece and comparable Southern European contexts.