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Foreign investors are targeting Greek real estate

23 July 2012 / 21:07:26  GRReporter
3498 reads

Victoria Mindova

"After the elections, there is a particular interest in real estate and holiday villas in Greece. There are Greeks among the investors, but quite a lot more are foreigners. Business buildings and vacant hotel complexes are another type of property that attracts high interest", said for GRReporter President of the Federation of real estate agents Ioannis Revitis.

We asked for his opinion as a representative of the real business, after the University of Athens published a study according to which the market of villas and holiday property in Greece is collapsing. The analysis, cited by Ethnos, indicates that the demand for such properties is almost zero, although their prices in the wake of the crisis have fallen by 50%. Currently, approximately 50,000 vacation properties available in the country, are offered for sale, but there is no interest. The Statistical Department of Athens University of Economics has conducted a poll, which indicates that 67% of the respondents said they have no intention of buying property in the next two years in Greece. Another 22% responded more evasively that is not very likely that they will make such a purchase at least until 2014. Market analysis shows that 89% of the respondents have no intention of buying a house by the sea or by the mountain any time soon. University analysts attributed the stagnation of the market to two main reasons. One is that Greek banks don’t have enough liquidity to lend to Greek citizens, and the second is that foreign investors are waiting (GREXIT) for Greece to exit the eurozone, in order to buy property at a price even lower than 50% of its initial value.

"The idea that foreign investors are staying in the corner and waiting for the drachma to return is false, it is not consistent with the truth", wrote in the Greek press Ioannis Revitis. "The foreign investors who show the highest interest in the Greek real estate market are mainly Russians, Italians, Dutch, Lebanese and Turks", says the specialist. They are looking to invest in real estate, which in the long run will always be profitable in Greece, he said. "Right now is a period of good deals on the market. Only last year, prices of office buildings fell by 10% -12%, and those of the villas and holiday houses by 15%. From the very onset of the crisis, prices are significantly lower."

Ioannis Revitis doesn’t deny that the local financial system has not yet been able to boost the real estate market and that is why Greeks are not making plans for large purchases. However, the increased interest of foreign investors raises new hopes for the country's real estate agents. To stimulate the property market, Revitis suggests that the government should adopt a law that would allow five-year visas to foreign citizens, who have purchased property in Greece, as is the case in Britain.

The President of the Federation of real estate agents busted yet another widely distributed myth in Greece, regarding the taxation of real estate. The developer insists that the new property tax, which was imposed by the government of George Papandreou last year, is not an objective obstacle for the decision of investors to buy real estate in the Mediterranean country. "The value of the tax is not high, varying within the average for Europe. 200 dollars annual tax on a medium-sized flat is not a large amount and the people determined to acquire property here know it." He proposes that the government revise the tax on the transfer of property, which has made a significant leap in the last three years. The Federation insists on its reduction to a base value of 5% and its change to be made on a scale, depending on the condition of the property, the area in which it is located, the price of the land on which it is built, as well as on the tourist flow.

Tags: Economics markets real estate crisis intense demand Greece
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