“All great plans for real estate on the Balkans, which depended private /bank/ financing are frozen and only the ones, which are in their final stage will be finished” said Mr. Giorgos Milonas as he tried to describe the real estate crisis on the Balkans – a field, which in the last ten years blossomed for Greek businessmen. “Greeks have penetrated this area mostly in Bulgaria, Romania, and Serbia, but aren’t the biggest players on the real estate market” specifies Milonas and also adds that Germans and the French have invested great sums of money in this field.

What do Greeks embark on in order to avoid the crash? They go toward other markets, which are not as affected by the credit crisis – countries from the Arabic gulf, the United Arab Emirates, and Qatar.

“Nowadays hard work is needed more than ever,” comments Milonas for the Sunday edition of “Vima” newspaper. It is obvious, though, that in the real estate field in Bulgaria, Romania, Serbia, Ukraine, and Slovakia the domino effect has taken place. In those countries, all private financed construction activity, whether it is apartment buildings, offices, or retail stores, has stopped.

Execution plans exist, but at the moment no capital is given from Greek as well as European banks. The question is whether the need for retail stores or apartment buildings in those countries, which are developing fast, has stopped. “Needs exist even in cities like Sofia, which is turning into a Balkan center…needs grow. This is why Greeks, who have finalized some buildings, are selling at the moment even though it is difficult. The problem is that all new projects, which were supposed to start from ground zero, have been postponed” comments Giorgos Milonas.

Fast solution is needed because the rumor in the banking field is that invested capital by Greek firms on the Balkans and Central Europe are valued to be over one billion and a half Euros. How long will they be able to last during the frozen period? “I hope that slowly-slowly, in three months increasing will start, because if it continues for more than six months, than the problem is huge” emphasized Milonas.

Real estate prices are falling in Bulgaria and Romania, but the buyer’s interest is not increasing because the value of the properties is not expected to rise. In the last five years, Greeks have purchased very good properties, in Bulgaria and Romania, at low prices, which is why they are not as worried. Another characteristic trait is that small Greek construction firms, from Thessaloniki, Seres, and Kavala, promote their activities in Bulgaria, Serbia, and Romania.

They build apartments buildings, small office buildings, and stores even in the smaller cities like Nish in Serbia, Plovdiv and Bourgas in Bulgaria, and Constantza in Romania. It makes sense those companies to be the first ones to be hit by the crisis, but in reality another myth is disproved – in the last 30 years, owners of small firms have accumulated capital from apartment building in Greece, so they can withstand the crisis better. The reason is because they are more flexible and prefer to finance their own projects as opposed to get credits from banks.