The Greek crisis and the deep recession associated have very negatively affected almost all economic sectors of the country in recent years. The construction and real estate sector was more extreme affected than other business areas. The sector that before the crisis accounted a very large part of the economic performance of the country and kept occupied hundreds of thousands of people from various professional fields directly and indirectly, in the years of the crisis, i.e. from 2008 to today, shrunk cumulatively by more than 70%. The crisis meant that some planned projects have been placed entirely on ice and others had to be stopped again during the construction process. Likewise, a large number of completed properties were never used and still stand empty are already left over.
The fact, that the Greek economy is according to many experts from the financial sector currently just before the turnaround, provides in conjunction with the still very low prices an ideal opportunity to right now – so to speak countercyclical – enter the Greek real estate market. This sector will decisively contribute to the upturn of the Greek economy. It is agreed that the situation in the country is now stable, and many national and international investors are already very intensive searching for suitable investment opportunities in real estate of any kind in Greece. Priorities in the first instance, of course, have larger properties that are to buy at good prices, but also real estate of medium sizes has a substantial interest. The rates are currently low and yields very high.
Against the background that the country has a very successful tourism season behind it, in which the number of visitors has seen an increase of almost 13% compared to the previous year, it is natural for investors to invest primarily in tourism real estate. In addition to the classic hotel projects there are also large holiday house complexes and residences for senior citizens targeted. The promising field of tourism real estate offers tremendous opportunities for investors, and it already shows that it will be one of the areas that will attract in the coming years many investments from abroad. It should be particularly noted that for the next few years a further increase in the number of international visitors is assumed. This means that the market continues to grow and is therefore optimally suited for investments. The increase in the number of tourists has to do – in addition to the very good site quality that provides Greece – with the fact that the country is compared to some competitors a safe and politically stable country. Greece is, after all, the EU’s fourth most popular holiday destination.
Tourism properties Greece
From such a famous destination like Greece, you think that it is absolutely developed with tourism real estate and generally well supplied. In truth, it looks like that a large number of properties in this area – particularly in comparison to competing locations – are of poor quality, especially since it corresponds to a superannuated standard. In many cases, these are obsolete hotel properties that concerning the equipment do not meet the current requirements. What at first seems once negative, on closer inspection quite becomes positively, because there exists enormous potential and actions are required, which can be very interesting and profitable for investors. And it also means that the level of competition is very low.
At this point it should generally be mentioned that in Greece there are very few high-quality luxury resorts and hotels that meet special requirements or have special concepts, such as boutique hotels, hotels with special architecture, hotels for special groups of people, etc. On the international tourism market, however, is to determine exactly for these products a relatively large demand, which is currently not always covered by the existing Greek offer. In summary it can be stated at this point that there is a huge demand in the market for high-quality hotel properties, which currently cannot be covered. This provides for potential investors an essential pro-argument, and they should think very intensive in any case about investing in Greece. Currently some private national and international project developers are busy to develop appropriate quality projects already. But these would not – even if all would be realized – cover the already large and ever-increasing demand by far.
Due to the crisis there are currently available large-scale plots and also existing older hotel facilities to relatively favorable financial conditions. These belong partly to hotel companies, which themselves are not financially able to adapt the property to the current requirements, and partly to banks that have taken over the estate of insolvent companies and individuals. Here also, in very many cases there exist occasions that are worthwhile to analyze in detail.
The sake of completeness in this context also should be mentioned that the Greek state awards for a variety of investments under certain conditions grant funds. This would – in addition to everything else – be another argument that should convince potential investors to take the location of Greece for real estate investments in the tourism sector intensively inspected.
Recent development in the tourism market
As previously mentioned, the year 2013 was from touristic view for Greece a very good year. For the coming year, further positive developments are anticipated. Many providers have already bound much larger quotas. In addition to that, for the year 2021 the mark of 24 million tourists is targeted and all necessary steps for the purpose are programmed to be taken. All this has led international investors and funds to have already great interest for investments in hotel properties in Greece. The first projects are already implemented, and for the next few years an immense increase in interest is expected. The current time is optimally suited for the preparation of an investment or an initial consultation in which the potential investors are informed of all key terms and conditions for further action.
The opportunities for investors
“In the middle of difficulties lie favorable opportunities”, said Albert Einstein, and the real estate market in Greece – in particular the field of tourism real estate – offers here currently truly optimal such occasions.
The market for hotel properties in Greece is a steadily growing market with a highly positive outlook. The lack of specific tourism products, the optimal site conditions, and the outdated hotel property portfolio offers in connection with the increasing demand and the very reasonable time, the optimum conditions to make an investment in Greece. It should be also mentioned that the real estate prices and construction prices are currently as low as never before.
“Life punishes those who delay”, Mikhail Gorbachev said a few years ago. For an investor who does not recognize the currently available opportunities in Greece, or even ignores them, applies precisely the same. In the coming period, in Greece, the pioneers once more will be separated from the followers…