The housing market remains firmly a seller’s market, with buyers on the defensive and expectations of further price rises reaching a new high. At the same time, concerns about interest rates and incomes have pushed Piraeus Bank’s Housing Sentiment Index to its lowest level since tracking began in the fourth quarter of 2023.
According to the bank’s quarterly survey by its Economic Analysis and Investment Strategy Directorate, the composite index stood at 43.6 points in the third quarter of 2026, down from 45.1 in the second quarter, marking its biggest annual decline (-2.2 points). The index has remained consistently below the 50-point threshold separating optimism from pessimism, after reaching a high of 48.1 points in the fourth quarter of 2024.
Buyers on the defensive, sellers holding back
Sentiment towards the housing market has remained strongly negative throughout the survey period. The relevant index stood at 12.8 points in the third quarter, while 60%-70% of households consistently judged the period to be “not at all favourable” for buying. The bank says the negative picture appears to be becoming entrenched, reflecting a sense that homeownership is beyond people’s means or that a property meeting all their needs is unaffordable.
By contrast, sentiment towards selling is relatively positive, as high prices that deter buyers work in sellers’ favour. Some 40%-45% consider the period very or fairly favourable for selling. The index nevertheless fell to 50 points, its lowest level, while its stabilisation over the first nine months of 2026 suggests, according to Piraeus Bank, that prospective sellers are holding back.
Record expectations of further price rises
The index of expectations for house prices reached a series high of 74.1 points, up from 68.1 in the second quarter, with an annual increase of 4.2 points. An overwhelming majority of households expect prices to rise over the next 12 months.
The bank describes the resurgence as “unexpected”, since it runs counter to the gradual slowdown in price rises recorded by the Bank of Greece’s house price index. As it notes, it remains to be seen whether this marks the start of a new cycle of expectations for price rises or simply reflects households’ broader inflation expectations.
Income expectations fall below 50 points
The sharpest reversal was in the future income conditions index, which fell below the neutral level for the first time. It dropped to 46.9 points, from 51.5 in the second quarter and 55.7 a year earlier, with the annual decline reaching 8.8 points. The series high was recorded in the first quarter of 2025, at 59.5 points.
The picture is similar for households’ current financial situation. The relevant index fell to 49.3 points, from 53.6 in the previous quarter, and was down 3.9 points year on year. It had remained consistently above 50 points until the first quarter of 2026, reaching as high as 58.3. Piraeus Bank links the movements in both indices to the climate of geopolitical turmoil and high inflation prevailing internationally.
Interest rates: record pessimism after the ECB’s pivot
The mortgage rate expectations index hit a low of 28.8 points, down 4.7 points year on year. The index works in reverse: the more households expect interest rates to rise, the lower it falls. The bank considers the decline “entirely justified”, as the ECB raised its policy rates again, from 2% to 2.5%, with further increases to 3%-3.25% expected.
The finding, however, conceals a paradox. Throughout the period from the fourth quarter of 2024 to the second quarter of 2026, the index remained below 50 points, meaning households expected rate rises while the ECB was cutting rates from 4% to 2%. In addition, 15%-25% of respondents consistently answer “Don’t know”.
According to Piraeus Bank, the responses reflect either a lack of information or an entrenched belief that interest rates always move against borrowers, who see their mortgage payment as a permanent burden. The bank highlights the need to improve public understanding of how the ECB’s monetary policy is transmitted to variable mortgage rates.
A warning sign
The overall picture of the market remains “cautiously positive”, according to Piraeus Bank. However, in the third quarter an overwhelming majority of households shifted their expectations from positive to mildly negative across all the survey questions. The bank’s economists note that it is dangerous to build an entire narrative on data from a single quarter. But if the shift is confirmed, it would be the first indication that geopolitical uncertainty, energy insecurity, inflation and higher borrowing costs are affecting households’ views of the property market and the economy as a whole.
The survey has been conducted quarterly since the fourth quarter of 2023, using an online questionnaire (CAWI) sent anonymously to a random sample of Piraeus Bank customers aged 25-75 across Greece. Results are weighted by region based on the 2021 Census. The composite index is the average of six sub-indices (housing purchase and sale sentiment, price and interest rate expectations, and current and future income), with 50 points as the neutral level, in line with the convention used for PMI indices.