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Greece real estate market and the pandemic: what's new?

30.06.2020
Author: Dinara Gracheva
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During the period of the coronavirus epidemic, Greece has proved to be one of the most prosperous countries in Europe on the overseas property market due to its low disease level, excellent conditions for distance shopping and the Golden Visa program.

Greek real estate market before the pandemic

The past year 2019 brought record figures for the Greek real estate market over the past ten years, when the foreign investment sector in the country amounted to 35%. According to the Bank of Greece, the inflow of capital from abroad for the purchase of real estate amounted to 1.45 billion euros, an increase of about 30% compared to the data for 2018, when this figure amounted to 1.128 billion euros. Thus, last year the volume of real estate purchases in Greece by foreigners increased by more than six times compared to 2016, when the amount invested in real estate by non-residents of the country amounted to 22.4 million euros.

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Among the buyers, a significant part were Europeans and Chinese, citizens of the USA, Canada and Middle Eastern countries were no less interested in buying, and there were also many buyers from the Balkans. The number of Russian-speaking buyers from Russia, Ukraine and other CIS countries is still inferior to the market leaders. A big role in increasing the volume of real estate sales to foreigners was played by the "Golden Visa" program - more than 15,000 foreigners became holders of a residence permit in Greece for investments.

Prices in the Greek real estate market in 2019 increased by 7%. The most popular objects were real estate in Athens and resorts. Domestic demand for resort real estate was small, mainly Greeks are interested in small apartments worth up to 70,000 euros. The cost of residential real estate in the city of Thessaloniki has increased the most (+28%) over the year. Thessaloniki is followed by the center of Athens (+27.8%), and then the Piraeus district (+16.3%). Also last year, there was an increase in the rental value of real estate across the country. Thanks to this trend, housing prices in some cities have reached the pre-crisis period.

The increase in the cost of square meters in Athens and Thessaloniki is due to high demand from foreigners, while most investors are motivated by potential future capital gains. An important role in this is played by the active development of short-term rental services in Greece (Airbnb, Booking, etc.) and the huge success of the investment program "Golden Visa". More than 75% of "golden visas" in the period from 2013 to 2020 were issued to foreigners when buying real estate in the Greek capital (7,200), respectively, this property will not be on the market for a long time, thereby contributing to the demand for Athenian square meters.

Real estate prices in popular regions of Greece

The average cost of residential real estate in Athens now exceeds 2000 euros per sq.m, but can vary from 1600 to 4000 per sq.m. depending on the specific location. In Thessaloniki, a square meter costs 1200-1500 euros, housing in Halkidiki can be purchased 1500 euros per sq.m. The average cost of real estate in Crete is 1,680 euros per sq.m, and in Corfu - 1,700 euros per sq.m. Due to the fact that wealthy Europeans, especially the British and Italians, have chosen Corfu - their communities make up a good quarter of the island's population, which also contributes to the growth of property values and the quality of infrastructure on the island.

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The coronavirus pandemic and the Greek real estate market

The demand for buying real estate in Greece during the coronavirus pandemic continued even with closed borders due to the possibility of remote purchase - until the middle of May, realtors noted a boom in attendance on all electronic platforms. Many buyers, having familiarized themselves with the real estate market in the country, realized that it makes no sense to wait in Greece, there is a shortage of liquid offers on both the primary and secondary markets, since construction is not actively enough. Among the advantages that encourage the purchase of Greek housing now, we can name the lack of a large debt of developers and buyers, as well as relatively low prices against the background of other EU countries.

In addition, the largest real estate projects in Greece are being implemented by international funds and are at the first stage of construction (Ellinikon project, Piraeus Project Cosco), and all the necessary funds for implementation, which are financed by the central European bank, have already been included in the budgets of 2018-2019.

Greece, like most coastal countries, is characterized by a direct dependence of the real estate market on the development of other sectors of the economy, especially tourism. According to Greek experts, domestic and foreign demand in the real estate market will recover completely as soon as the situation in international tourism stabilizes. It is known that the most popular object for investment in Greece is housing for rent, most often short-term. Now this market has temporarily stalled and is going through hard times due to the lack of tourists - Greece was one of the first countries in the European Union, which closed its borders to foreigners from March 15 to June 1. Therefore, the owners of such housing had to reorient themselves to sell their properties or start renting them out for a long-term lease.

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The yield from long-term rentals is lower, but it is much more stable.As a result, the investor receives a guaranteed income in euros and is deprived of pressing problems in solving issues that the owner of an object for short-term rent constantly has to face, cleaning, constant search for tenants, etc. In general, investments in long-term rentals are high-quality and low-risk. Experts also note that now in many countries the younger generation is less inclined to buy real estate, get attached to a place, get into loans and mortgages. For such people, long-term rental is the most relevant trend, so it will be interesting for small investors to invest money in such objects.

If the buyer is still interested in the "short-term" format, then now it makes sense to pay attention to the hotel business: due to the almost three-month absence of foreign tourists in Greece, it is now possible to profitably purchase hotels. Hotels in Thessaloniki, Halkidiki, Kavala, and the Cycladic Islands enjoy particular success among investors.

How to buy real estate with discounts

The cycle of choosing and buying real estate can take place both very quickly and stretch over time up to a year. Therefore, we can expect the emergence of new opportunities, the entry of new objects into the market (due to leaving the lease, urgent sales, etc.) and favorable offers. An experienced realtor, interacting between the buyer and seller, knowing the specifics of the region and a particular object, will help you get a good discount.

Each seller has his own minimum in his head, for which he is ready to sell his object. As a rule, sellers pledge1000-3000euros for bidding on objects worth up to 100,000 euros. The situation with the pandemic, of course, has greatly affected the economic situation of most people, but not yet to such an extent that the Greeks part with their apartments for a song. For example, the demand for housing in Halkidiki is consistently high, the flow of customers goes all year round, so sellers are confident that they will always be able to sell their property for a reasonable price. 

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Experts also expect the appearance of good objects in scarce places for the purchase of picturesque places – this may become possible due to the fact that the tourism industry will suffer losses and some of the objects will be put up for sale. And a good realtor will help you not to miss this rare opportunity.

Portrait of a buyer during a pandemic

Experts identify three main groups of motives among buyers of real estate in Greece, which have not fundamentally changed during the pandemic: these are investors; buyers investing in their own quality of life; buyers aiming to obtain a residence permit, preparing a "spare airfield" or planning to move to permanent residence. But it is obvious that interests have shifted. Buyers of inexpensive housing worth up to 50,000 euros, who purchased it for rent, have practically disappeared. If, for a similar amount, we are talking about buying real estate "for yourself", then such transactions continue.

Now people want to buy real estate in Greece not to earn money on rent, but to guarantee a residence permit, the presence of which in conditions of closed borders is of fundamental importance for free international movement. Moreover, the selection of an object, its purchase, payment and even the initial submission of documents for a residence permit in Greece can be carried out remotely, so many do not waste time and actively choose objects for purchase.

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Experts are also now noting an increase in interest in houses for round-the-clock living (it is not known how long the pandemic will last), as well as in luxury real estate -people want to live in separate remote villas without neighbors. The pandemic has particularly clearly identified such buyers in the Greek real estate market. Among them are representatives of the CIS countries, the USA, Canada, Israel, etc. that is, those countries that are not part of the European Union. Moreover, the crisis made it clear that you can work remotely from any country in the world and not waste time on the way to the office. Therefore, many people are thinking about the question where they will spend the next possible quarantine: in a small Moscow apartment or in a house with a garden by the sea, walking with a dog along the edge of the beach?

Thank you for your help in preparing the material:

Konstantinos Petridis, head of the company DKG Development

Natalia Kovaleva, Sales Director of the companyResearch InstituteReal Estate Services

Natalia Ruva, company expert Roula Rouva Real Estate Agency

Svetlana Yuvchenko, representative in Russia of the companyDionisiou Real Estate

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