As Greece enters its sixth year in recession, property hunters are taking advantage of the low prices and buying up luxurious villas and family homes. And for property investors, Greece is providing them with an opportunity to enter the high-end market in Europe.
“Prices have fallen by around half since 2008. You can find excellent quality vacation homes in Greece at similar prices to Spain and Turkey, where previously they could be as much as 40 per cent higher because so few were available,” Katerina Samaropoulou of Samaropoulou Associates, a Greek estate agent, tells the Financial Times.
Since the outbreak of the Greek debt crisis four years ago, property values nationwide have dropped by around 32 per cent, according to the Bank of Greece.
Greeks who bought vacation homes – which was a popular investment choice in the ’00s, are now being forced into selling for a number of reasons: maintenance costs have become too high, a new property tax was added to the bills; and also the increased regulation on people who rent on properties on declaring their income to the taxation department.
Investors are looking at areas – specifically the islands – that have always been an attractive tourist option for foreigners. The most popular market places include: Corfu; Mykonos, Santorini and the Peloponnese. Crete and Halkidiki also featured highly.
But there is some light to be shed in all this and that is if more foreigners and international investors are buying up properties, it would boost tourism activity towards Greece.
Danos Athens Property Market Report from the second half of 2013 states: “The reforms in the real estate legislative context that incentivise investors, as well as the decline in residential prices, have boosted investors’ interest for the Greek market; interest coming mainly from abroad.
“Chinese and Russian investors, who are looking to benefit from visa grants, have expressed their strong interest to invest in the residential real estate market of Greece, especially in Athens, Rhodes, Corfu and Crete. Moreover, there is an increase of interest coming from the UK. It seems that the demand is focusing on Cyclades and Corfu.”
Four out of 10 Greeks recently told a Kapa Research poll they would willingly hand over properties to the state to fulfil future payments; one in three, unable to keep up mortgage repayments, feared their homes would be confiscated in 2014. This is because over a third of Greek households are unable to meet their tax obligations.
In an article in The Guardian, property analyst Christos Bletas said that the Greeks have inherited a dark sense of humour about their plight.
“The joke now doing the rounds is: if you want to punish your child, you threaten to pass on property to them,” he said. “Greeks traditionally have always regarded property as a secure investment. But now it has become a huge millstone, given that the tax burden has increased sevenfold in the past two years alone.”