Greece is no longer in the same precarious position that it was one year ago, which is why we don’t see Greece anymore in the headlines. But there is no question that the Greek economy is still pretty much down, and the situation isn’t likely to improve by much in at least 4 or 5 years. So, should you sell property in Greece right now?
One of the major sticking points during the bailout negotiations was a law that virtually prohibited residential home foreclosures, which the creditors wanted to be removed. So we are in a situation where many homeowners are not sure about how long they are going to hold their homes for, so they choose the next best option, which is to put their homes on the market.
There’s a glut of homes for sale in Greece. This, in combination with declining incomes and zero mortgage financing has effectively crashed the real estate market in the country. Prices of residential property have dropped by 40% in Greece over the last few years. In fact, some argue that the fall could have been even bigger.
There are laws in Greece that state that homes cannot be sold by owners who fail to pay their home ownership taxes. If they were to do that, the price of the property would fall even below the cost of the loan that was taken to buy the house in the first place.
Now, the situation may well be far from ideal, but for many foreign investors, including vulture funds, this presents a golden opportunity. Despite the precarious situation Greece finds itself in, it is still a first world country – a European country and a member of the European Union. So, a property in Greece will always have a certain value.
The drastic fall in home prices has attracted many distress funds or vulture funds as they are called, to do business in Greece. These funds have been excited by the prospect of amazing bargains available for rock bottom prices.
But it’s not just the vulture funds; there are many wealthy individuals from non-EU nations, who have been attracted by the prospect of an EU citizenship, which can be had by buying properties in Greece worth €200,000 – as promised by the Golden Visa scheme. Now, this compares well with the Golden Visa schemes offered by Spain and Portugal, which require investors to put up a minimum of €500,000.
Wealthy investors are attracted by the quality of properties available in Greece, especially in the Greek islands of Santorini and Mykonos. Indeed, the demand in these islands is at an all time high right now. The decline in home prices in these islands was just 3% last year, compared to over 10% in the rest of the country. Clearly, the holiday home market in these islands is completely disconnected to what’s happening in the rest of Greece.
So, while investors are still wary about investing in Greece in the current environment, they certainly do not mind buying high-end properties in Santorini and Mykonos. Properties here are available for a bargain because of a favourable exchange rate, given the relative strength of the US dollar and the British pound and the decline of the euro. So there is a huge interest in these properties from American and British investors.
Buying a holiday home in Greece presents a real opportunity for those who are looking to buy a holiday home in Europe at a bargain price. As said earlier, Greece is still very much a first world nation, and the quality of life here is still very good – when compared with many other nations in the world.