Greek assets gain wider appeal

Capital inflows from abroad for property acquisitions in Greece reached a historic high last year, with estimates putting the total amount at 503 million euros.

Bank of Greece data showed that the 86.5 percent increase on 2016 was the highest in the last decade, illustrating that demand from foreign buyers for houses and other properties has returned to a level last seen before the outbreak of the financial crisis.

The considerable growth trend is supported by the fact that 2016 had also set a record high for the crisis years, with an inflow of 270 million euros.

This not only points to foreign investors’ confidence in the local property market’s recovery prospects, but also highlights the more attractive investment opportunities Greece is now offering compared to other countries.

The huge growth of the Airbnb phenomenon through home-sharing websites means that certain properties in Greece can provide their owners with a considerable income. This development, combined with the prospect of future capital gains and the Golden Visa program granting a five-year residence permit to non-European Union citizens who invest 250,000 euros or more in this country, have generated unprecedented demand from abroad for properties in Greece. This not only concerns holiday homes, as had been the case up until the outbreak of the crisis, but also apartments in the center of Athens.

That trend is confirmed by the statistics of Enterprise Greece, which runs the Golden Visa program, as well as estate agents that are increasingly cooperating with their international peers to find properties for interested foreign buyers. Data for the first 11 months of 2017 show that more than 560 residence permits were issued to third-country investors during that period, taking the total number of Golden Visas issued since June 2014, when the program started, to 2,170 (not including permits issued to close relatives of investors). Almost 50 percent of them (945 permits) went to Chinese property buyers and another 387 to Russians, while 191 Golden Visas were issued to Turkish investors.

via ekathimerini

Greece's successful market return also mirrors the return of investor confidence

Greece's successful return to bond markets is the most recent in a series of "positive messages" for the economy that included the country posting a record year for tourism and forecasting an even stronger 2014, Tourism Minister Olga Kefalogianni said.

"We have left the big difficulties behind us," Kefalogianni said in an interview on Monday. "The trend is now turning and we’ll see the Greek economy start recovering this year."Prime Minister Antonis Samaras has called the tourist industry, which accounts for about one sixth of gross domestic product, "the first locomotive that started and began to pull our economy out of a painful six-year recession."Greece successfully tapped debt markets last week for the first time in four years, selling 3 billion euros ($4 billion) in five-year bonds.Greece saw a record 18 million visitors last year, as travelers from Germany and the UK, who shrugged off recent images of a strife-torn country, were joined by visitors from growth markets like China and Brazil. Industry projections show this year to be ahead of last year’s pace, the minister said."The messages from all our markets are extremely positive, giving us the confidence that 2014 will be a new record year," Kefalogianni said. Her ministry's forecasts match estimates by the Association of Greek Tourism Enterprises.

Recovering MarketsTraditional source markets for Greek tourism, which had declined sharply in recent years, have begun recovering, Kefalogianni said, with pre-booking figures from the country’s industry association indicating Greece can expect more tourists from the UK, Germany and France this year. Germans are the most frequent visitors to the country, followed by the UK, the Former Yugoslav Republic of Macedonia, France and Russia.Asked if Russian tourist visits, which reached 1.4 million last year, would be affected by tensions between that country and the European Union over Ukraine, the minister said, "in the first three months of 2014, we saw an increase of 12 percent in the number of visas issued in Russia, so I would say this as a message is definitely a very positive one."In addition to generating revenue, tourism is also a major source of investment for the cash-stricken Mediterranean country. Part of the government's infrastructure-improvement plan is designed to help raise the contribution of tourism to the country's GDP, Kefalogianni said.In December, Greece's Hellenic Republic Asset Development Fund, charged with raising cash through asset sales, chose the Jermyn Street Real Estate Fund IV as preferred bidder for Astir Palace Vouliagmenis SA, a luxury-resort operator jointly owned with the National Bank of Greece, after Jermyn Street bid 400 million euros for 90 percent of the company.

Oaktree Capital Group LLC in March set up a joint venture with Greek hotel owner Sani SA to run as many as six luxury resorts. "It’s very positive for Greece that a fund as big as Oaktree" chose to invest in the country now, Sani Chairman Stavros Andreadis said by phone. "It confirms investor confidence toward Greece."

by Eleni Chrepa/ekathimerini.com
[Bloomberg]

Property abroad: Buying a Greek retreat | This is Money

Despite its current economic woes, Greece is still proving a popular place for Brits looking for a bolthole abroad. Find out how to get your own Greek retreat. When German MPs recently suggested that Greece should sell off a couple of islands to alleviate its debt crisis, there was a flurry of indignation.

Such dramatic sales are unlikely to happen, but, with Greece facing public unrest and tax rises after years of spendthrift government and widespread tax evasion, what are the implications for the overseas property market on that highly prized coastline?

Greek tourism had been on the up, with interest in the islands as a holiday and second-home destination growing slowly, boosted by the wave of publicity after the movie Mamma Mia! was filmed on the island of Skopelos.

While the country has miles of beautiful, unspoilt seafront backed by charming traditional villages, demand for the islands has always been held back by poor accessibility, though flights have improved.

Fearless buyers might now be tempted to grab a villa at a knockdown price, but, amid such uncertainty, is it best to sit tight and wait? Local agents say the domestic market is suffering after banks tightened their lending criteria and everyone else tightened their belts.

However, while there have been price drops in domestic housing in Athens, there are fewer cheap deals in the second-homes market.

'Foreign buyers are hoping for bargains, but they're scarce,' says Ioanna Plakokefalou, of Hellenic Realty, which covers the eastern Aegean and the Peloponnese.

'We had been expecting price drops earlier this year, but they didn't come. Up to 85% of Greeks own property and still think it is the best type of investment.

'The most significant price drops — of 20% — are when foreign nationals need to sell as a result of crisis in the rest of Europe.' Robert Key, of Cluttons Greece, says the tourist hotspots are faring best in the property market.

'Where there is greatest tourist demand, I don't think we are going to see further price falls because people realise that in the long term Greece will be a successful secondhomes market.

'It needs to encourage foreign investors, but the problem is that there are billions of euros worth of projects — hotels, housing projects and marinas — stuck in the laborious planning system waiting for licences.

They fast-tracked such projects for the 2004 Olympic Games and they need to do the same again.' The best markets for Cluttons are Corfu, Kefalonia and other Ionian Islands, plus Rhodes and Crete.

One example of owners needing to sell can be found on Zakynthos in the Ionian islands, where a British couple are selling their halfbuilt project on a 66,000 sq ft plot of land 70ft above the sea.

'There's one completed threebedroom villa with a pool, the same again half-built, and plans for a third,' says Key.

'Previously, this plot was worth £1.4m but they are prepared to take offers of £685,000,' says Key.

He says fantastic bargains are to be had on the less well-known Pelion peninsula — a lush, mountainous spit three hours north of Athens, or 20 minutes from the new Volos airport served by Ryanair.

With clean beaches and traditional resorts frequented by locals, it's bound to be popular.

It was one of the locations used in Mamma Mia! and has plenty of 200-year-old stone properties suitable for renovation.

'You can get a big property on a large plot with great views for £140,000 to £180,000 — that's a quarter of the price of one on Mykonos,' says Key.

The fashionable party island of Mykonos in the Cyclades group is home to some of the most expensive and contemporary holiday homes in Greece. Prices have not been affected, according to Roi Deldimou, of Beauchamp Estates.

'There aren't many deals because wealthy owners prefer to wait for the right price or withdraw their homes from sale,' she says.

She thinks that the opening of a new superyacht marina this summer, along with a branch of Hermes, will continue to draw the high-rolling crowd.

from: www.thisismoney.co.uk

A recent article from FT.com

"The Eurozone is a clumsy hybrid. The giant currency union has bound 16 European Union states into a monetary bloc. The member countries, however, remain sovereign states with control over their own taxes and spending. So keeping the Eurozone’s tax and spend policy in harmony has always been a fundamental problem.

That is why the monetary area has fiscal rules. These are one-track instruments, however, focused permanently on frugality. Their primary purpose is to protect big nations from being forced to bail out their smaller, less prudent neighbours. So the European pledge to rescue Greece from its debt crisis shows that the Eurozone’s rules have failed.

The monetary union’s architects intended that the Brussels institutions and prudent national leaders would apply pressure to spendthrift treasuries to keep them in line. In addition, the Eurozone’s “no bail-out” clause, which banned one country from rescuing another, would force prudence on to profligate countries because creditors would demand higher interest rates from high debt, high-deficit states.

But peer pressure was a puny weapon, little used and largely ignored, and investors overlooked the Eurozone’s bar on rescues. Over the past decade, the market has been a lax disciplinarian. Now that Europe has said it will not allow a sovereign default, the “no bail-out” rule threatens to unravel entirely. Investors are now less likely to believe that any Eurozone state truly stands on its own."

I would say that it is time for the EU to entirely re-examine its basis of existence. Furthermore, we should all focus on reducing unemployment throughout Europe as it is the only fail-proof way towards advancement, social justice and prosperity.

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