By George Georgiopoulos

ATHENS (Reuters) – A recovery in Greece’s residential real estate market picked up pace in the third quarter, as the economy continued to expand and inflation rose near a three-decade high, central bank data showed on Tuesday.

Property makes up a big chunk of household wealth in Greece, where the home ownership rate is about 73.5%, above the euro zone average of 66%, according to European Union statistics on income and living conditions.

Greece’s housing sector recovery has been driven by an expanding economy and foreign interest.

Apartment prices rose 11.2% in the third quarter from the corresponding period a year earlier, Bank of Greece data showed, and the pace was up from a 10.1% increase in the second quarter.

The uptrend benefited all areas of the market, including old and newly built apartments, and all regions, although price gains in capital Athens led the way.

Prices rose by 13% year-on-year in Athens, where home-sharing platforms such as Airbnb and a “golden visa” programme – a renewable five-year resident’s permit in return for a 250,000-euro ($285,000) investment in real estate – became popular.

Greece’s economy grew at an annual 7.7% clip in the second quarter, beating forecasts, but slowing from a pace of 8.0% in the first quarter, on strong consumer spending and investments.

Consumer inflation accelerated to 12.0% in September, near a three-decade high, after surging costs for energy, housing, transport and food.

House prices fell 42% between 2008 – when a protracted recession began – and the end of 2017. The market was hit by property taxes imposed to plug budget deficits, tight bank lending and a jobless rate that peaked at 27.8% in 2013.

Economic prospects improved later, with Greece emerging from its latest bailout in August 2018 and now accessing international markets for funding.

Following is a table on Greek apartment prices from Greece’s central bank:

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2016 2017 2018 2020 2021 Q3

Index 59.6 59.0 60.1 67.3 72.4 81.9

Change y/y % -2.4 -1.0 1.8 4.5 7.8 11.2

New (up to 5 years) 61.2 60.7 61.9 70.0 75.7 86.0

Change % -3.0 -0.8 2.0 4.9 8.1 12.2

Old (older than 5 years) 58.6 57.9 58.9 65.6 70.4 79.4

Change % -2.0 -1.2 1.7 4.2 7.2 10.5

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source: Bank of Greece

(Reporting by George Georgiopoulos; Editing by Clarence Fernandez)