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Greeks "buy up" London

26 October 2015 / 20:10:30  GRReporter
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At least 1.5 billion euro is the estimated value of real estate in the UK and Germany acquired by Greek private investors during the years of economic crisis and in particular from 2010 to the end of 2014. This regards  those owners who will face the tax authorities in their efforts to put a tax on real estate of Greeks abroad.

According to estimates by market representatives, during the crisis and especially between 2010 and 2012, Greeks invested at least 1 billion euro in real estate in London. London is one of the preferred places of those Greeks who chose to invest their money abroad, withdrawing them from local deposits. In 2012 alone, real estate agencies in the UK, such as Savills, estimated that Greeks had invested at least 300 million euro in real estate in London. The peak was in the first half of 2012, when real estate purchases by Greeks increased by 50% on a yearly basis, due to the political instability in Greece caused by the two election rounds that took place within one year.

As for the German real estate market, based on data from the German real estate agencies, the local media calculated that the Greeks held around a 5% share of all foreign investors. Based on the data available, this means an amount of around 65 million euro on average per year over the past five years. This in turn means that for the period 2010-2014 Greek investors put into the German real estate market 325 million euro at least.

In every case, the taxable value is much greater, as investments were made in the years before 2010, not just in the UK and Germany, but also in other European countries such as France, Switzerland and Italy, which are also popular investment destinations of the Greek capital. It should also be borne in mind that the prices of real estate acquired in the UK and Germany in the period 2010-2012 are now much higher due to the increase in property prices in these countries in recent years.

However, factors in the market indicate that the announced intention to put a tax on these properties, under the model of the tax introduced by former Italian Prime Minister Mario Monti, will harm the efforts to increase the state revenue. As stated by Pavlos Anastasiadis, head of the British real estate agency Ellune Property for the newspaper Kathimerini, the emergence of new investors in the UK real estate market is practically reduced to zero following the introduction of capital controls in Greece.

Meanwhile, many are trying to sell the property that they have acquired in recent years to capitalize the significant gains accrued during the period. The majority of them are however rushing to invest their profits in other real estate in London that will bring a better income, even if this involves a smaller area or properties that are located in less expensive areas of London.

And, as previously mentioned in the same newspaper by Konstantinos Folbah of Immoconsult agency that specializes in finding real estate for Greek investors in Germany, "capital controls have interrupted this activity, unless this is a case of people with deposits abroad or property in other countries that they can sell."

Tags: Greek investorsReal estateLondonGermanyCrisis
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