Greeks who have the means may be leaving in droves, but after 46 years in exile the former king, Constantine II, has moved back to his crisis-plagued homeland.

The deposed monarch, who was forced to flee Athens shortly after the seizure of power by a group of army officers in 1967, has stunned Greeks – and most of his relatives in the royal households of Europe – by resettling in the capital where he was born and schooled.

"He and Anne-Marie have decided to move here permanently," said a member of Greece's small circle of royalists, referring to Constantine's Danish-born wife. "His son Prince Nikolaos and his wife Princess Tatiana made the same move a few months back."

Soaring property prices in London apparently spurred the move. But Constantine, who was dethroned by referendum on the return of democracy in 1974 and stripped of his Greek citizenship by the then socialist government 20 years later, is known to have been homesick.

More than a decade ago he told a Greek newspaper: "No one can keep me away. For so many years I have lived through my own Golgotha, now I am ready to return."

The 73-year-old, a first cousin of the Duke of Edinburgh and Prince William's godfather, faced the double whammy of not only being unwanted in his country but also being financially constricted: in 1994 he suffered the humiliating blow of also seeing his palaces and other royal estates expropriated in a nation where republicanism runs deep. The European court of human rights, to which the monarch was subsequently forced to resort, did little to alleviate his plight when, more than a decade later, it ruled that the Greek state compensate Constantine for a fraction of the £320m he had originally sought in damages.

Earlier this year, however, Constantine struck lucky when he sold his north London mansion, his home for the past 30 years, for £9.5m. By contrast, property prices in Athens have plummeted to the point where real estate can be acquired for a song: studio flats, should the ex-king want one, are selling for as little as €6,000 (£5,000) in the city centre.

"From that point of view it was considered the very best time for his majesty to not only downsize but return," said another insider, adding that the royal was sending out scouts to scour the property market with a view to buying a permanent residence in Athens.

With Greece mired in a sixth straight year of recession and unemployment at record heights, an estimated 300,000 Greeks – the vast majority highly qualified professionals – have left the country since the eruption of its debt crisis. The reversal of that trend by Constantine, who has still not been forgiven for the support he initially gave the colonels – the junior army officers who threw the country into seven harsh years of military rule – is unlikely to be received lightly on the left.

The former monarch, who in recent months has been spotted cane in hand walking the streets of Athens, has repeatedly denied political ambitions. Instead he has long maintained that his former subjects have been "deliberately misinformed".

Constantine's treatment by his homeland has been an ongoing source of grievance for the British royal family with the Duke of Edinburgh, who was born on the island of Corfu, expressing fury at the way his cousin has been dealt with.

But the new generation of Greek royals appear to have forgotten the past. Prince Nikolaos, it is said, is now renting the apartment of the daughter of Andreas Papandreou, the late socialist leader who gave his father so much grief.