Real estate in Greece – The comeback
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In recent years, the real estate sector in Greece had become because of the crisis almost entirely uninteresting for investments from abroad. The domestic demand for property for own use had declined immensely. The decline in demand, which affected more or less consistently real estate of all uses, resulted in the years 2008-2013 in combination with the then existing vacancy in certain real estate at a cumulative price decline of 40% on average. Also, rents were reduced by mutual agreement in most cases in this period between tenant and landlord at least 30%.
However, this now seems to belong to the past! The political stability, the first positive figures from the business world, the very good tourism year 2013 and the excellent prospects for 2014 and the first positive media reports from abroad seem that the end of the Greek crisis – and thus also the end of the crisis on the real estate sector in Greece – is nearing its end. A variety of economic indicators shows that the Greek economy is now just before the turnabout – and now the ideal time for property investment in Greece has come. Who can interpret economic figures correctly, should now be able to recognize the change. (read also “Invest in Greece“)
With regard to the price development of the properties you can currently assume that prices are at a low point, and that real estate only sporadically – where liquidity problems exist – is sold under current market prices. It should be emphasized that the price correction was due to the crisis much larger than appropriate. We cannot assume a direct price increase in the coming months, but you should expect that prices in the next five years will rise again on the “right” market level, which should certainly be recognized in an investment.
Many institutional investors and international brokers recognize already on analyzes that they have conducted in the past few months, more clearly the previously mentioned reversal. Accordingly, since the final quarter of last year, representatives of investors and funds are looking for suitable opportunities in the metropolitan areas of Athens and Thessaloniki. Here are primarily searched offices and commercial real estate in 1A-locations and secondarily other objects which yield high returns safely.
On the other hand, the sector of tourism real estate is again more interesting. This is undoubtedly linked to the very good development in the tourism sector, which is expected for the coming years to go on. In that sector they are looking for high-end luxury real estate on the islands and existing hotels which are to buy on good terms. Most recently, there are also demanded again apartments and small holiday homes, who may be also on the mainland, such as in Halkidiki or in the Peloponnese. It should be mentioned that in addition to the prospective buyers from Russia, China and England, now also interest stepped back from Germany; the latter had somewhat aloof in recent years.
What is it for the location of Greece?
“The country in which the gods take a vacation,” is due to its location and very good weather conditions optimal for rest and vacation, as well as a residence in old age. But that is only one side of Greece.
Due to the implemented structural reforms in recent years, the site becomes more interesting either to other activities. It should not lead to confusion if in the near future Greece is interesting as a production location for the industry. The privatization of ports and other state-owned enterprises, but also because of the new optimal conditions for enterprises of different types, a strong need for new property will result. Here we recommend occasionally the development of completely new real estate products, because the stock of real estate in Greece is partially obsolete and only conditionally suitable. Regardless of whether we are talking about new properties or also the renovation of existing properties, all this represents an ideal opportunity for investors to enter now the Greek market and to benefit from the favorable circumstances.
Areas where we see demand for properties the coming years are luxury tourism real estate (hotels and villas), offices and commercial buildings, low-cost spaces for start-ups, logistics, medical buildings, nursing homes/senior residences and special structures for manufacturing companies .
Greece has made some enormous progress in the reform of the state in recent years. The situation is now stable and all prices at a very low level. The outlook in many areas is to be assessed as optimal and the potential is immense. With good preparation and with appropriate local consultants you could realize promising investments in real estate in Greece … the Greek real estate market is making its comeback!
If you need more information concerning “Properties in Greece”, do not hesitate to contact Mavvidis + Partners.