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Greek economic environment?
Greece has become the epicenter of a real estate and tourism investment boom, as reports the New York Times. This frenzy is favored by the desire of the Greeks to earn money by reselling their properties, or to exploit them for seasonal rental. However, a substantial part of this growth comes from SCHENGEN Visa grants to foreigners.
In 2013, Greece implemented this policy, which had already been successfully presented to other European countries, nevertheless with a number of modifications.
The Greek economy resumed to growth, with a rate of 2% in 2018. Greece also recorded a primary budget surplus. Furthermore, if the country is finally seeing the light at the end of the tunnel, it mainly owes it to the attractiveness of its real estate, a sector that employs over a million people and accounts for 20% of its GDP, along with its tourism industry. In 2017, Greece passed the 30 million tourist threshold, compared to 28 million tourists only in 2016.
Compared to other EU countries, FDI inflow (foreign direct investment) to Greece remains weak and has fluctuated at lower levels since 2009 compared to the pre-recession era. However, in 2017, inflow reached USD 4 billion, their highest level since 2009. This 39% increase is considered to be a sign of economic recovery. According to preliminary data from the Bank of Greece, FDI inflow increased to 3.3 billion euros in the first eleven months of 2018.
The Legislative Decree 2687 of 1953 and Article 112 of the Constitution of Greece, grants preferential tax treatment to foreign “productive investments”, and Law 4146/2013, entitled “Creation of a Business-Friendly Environment for Strategic and Private Investments”, aims to promote investment.
Today, residential property in Greece costs 40% less than in 2008: this means that the potential for price growth is high.
The Greek real estate market is highly diverse. For instance, Mykonos, Rhodes and Santorini are already very lively, bustling cities. The occupancy rates of local hotels vary between 80 and 90%. Greece is on its way for a new period of growth in its real estate sector. To this end, a number of prerequisites are already met:
Economic recovery
Athens is the economic center of Greece, generating 19.9% of the country’s GDP - more than any other capital city in the EU. It is safe to assume that the recovery of the Greek economy would have a direct impact on the capital.
After a decade of economic recession, the real estate market has become highly attractive: since 2008, real estate prices in Greece have dropped from 30% to 50% depending on the region. Such price levels have not gone unnoticed to foreign investors, especially in the Greek capital. Until market prices resume growth, the Greek housing stock will remain an excellent investment opportunity, where demand can only continue to increase.
According to the Greek Tourism Confederation (SETE), Greece attracted over 30 million tourists in 2018. According to MasterCard, Athens ranks among the top 20 European cities in terms of the number of international tourists spending at least one night at their destination.
Property in Greece is cheaper than in many other European capitals: approximately three times cheaper than Lisbon, Madrid and Berlin, five times cheaper than Vienna and nearly eight times cheaper than Paris.
GREECE PREMIUM recommends investing in residential real estate or short-term rental real estate, given that Greece continues to attract tourists, regardless of the dynamics of its GDP.
An easy way to access the market is to acquire an apartment that is ready to rent. One of the major advantages of Greece lies in the fact that the Greek rental property market is loosely regulated. A more difficult but more profitable strategy is to take part in a redevelopment project. It is possible to buy cheap property, do repairs, and rent or sell at a higher price.
We are currently witnessing the revival of the Greek real estate market. Investors who wish to leverage the growth of this market are encouraged to act now.
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