Is Greece Europe’s Forgotten Market?

Is Greece Europe’s Forgotten Market?

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naxos-greece|credits:arkntina
A Marina community in the town of Naxos, Greece

Greek islands are well renowned for their sunshine, laid back lifestyle, great food and not to forget Greek folk songs. While other European markets approach a stand still, there appears to be an increasing number of rich Europeans buying luxury properties on the Greek islands.

With popular second home property hotspots like Bulgaria and Spain coming to a complete halt and Germany slowly but steadily rising, Greece appears to be surging on strong.
Some industry experts reckon that certain real estate investments have paid off handsomely over the last few years in Greece. Yannis Perrotis, head of CB Richard Ellis-Atria real estate consultants in Athens said “The islands have something for everyone, and they are close to home for Europeans, so foreign interest is strong.”

Prices for top end properties range from €3,000 to €7,000 per square meter on the popular Aegean islands of Naxos, Paros, Rhodes and Crete. More laid back spots like Patmos, Antiparosn and Tinos have a similar price range.

On the more cosmopolitan party islands of Santorini and Mykonos real estate costs are unlimited. Whatever takes your fancy usually goes. This is serious high end investors market where only the rich can play the game.

santorini-view-caldera-greece|credits:ehpien(flickr)
View of the Caldera from a terrace in Santorini, Greece

In Santorini foreign interest is more or less restricted to areas around the caldera. The caldera is a large central lagoon, created by a massive eruption 3,600 years ago. Most villas with caldera views cost €3 million to €4 million.

Currently there are about 70,000 foreign owners with property in Greece.

According to local real estate agents, the most active buyers are the Brits and the Germans. Even the global market gloom hasn’t had any effect in the sale of high end property in Greece they say.

New zoning law for 2009

A new national zoning law is expected to clarify where construction is allowed and where it is forbidden early in 2009. The current minimum plot size of 4,000 square meters will most likely stay as is.

At present, prospective buyers of Greece real estate must hire a lawyer who can navigate the land register and deal with archaeological and forestry authorities. It is also recommended to enlist a civil engineer for older buildings. Earth quakes are common in Greece and if the structure of the building isn’t adequate, it could cost the buyer a lot of money should a quake do more damage.

It is also important to be aware of the various rules that apply on the Greek islands. “Some islands require more paperwork, others are stricter about issuing building licenses, so it is best to talk to an agent first,” says Giorgos Zappas of Re/Max Properties in Athens.

In general, EU citizens face the same requirements as Greeks. Buyers of real estate must pay taxes of 19 % on new constructions and roughly 10 % for older properties.

Amazing growth

To demonstrate the amazing growth of Greek real estate read this story: a British-Corfiot couple, recently completed the renovation of a 400-year-old mansion, a relic of the island’s Venetian occupation. “It was a real challenge to do it in the original style but we got there in the end,” said the owner.

They bought the property 14 years ago for the equivalent of £56,000 and spent about double that on renovations over the years. Now, they say, their home has been valued at €1 million.

Athens is a particular hot spot for buy-to-let properties. UK buyers make up a massive 80% of Greece’s foreign property purchasers. They are attracted by low property prices, a modern tax system, a strong mortgage market and measures that prevent over development. Overseas property magazine ‘A Place In The Sun’ reported that Greece was the sixth most favorable destination for foreign buyers with house price increases by 134% between 1995 and 2004.

Be wary of the underhand deals

Buying property in Greece isn’t always done by the rules. It is important to get to grips with the local laws and enlist the help of a lawyer with the necessary expertise.

In the end, it looks like the Greek property market is currently more attractive for high end investors anyway. Prices are certainly indicative of this and although there will be more affordable properties elsewhere, we wonder what the quality might be?

Have you previously invested into Greece real estate? If so, what are your experiences?

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