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Special Insert: Investments & Real Estate in Greece

Investing in Real Estate in Greece

March 23, 2022
By Eva Deligianni

The real estate industry is deeply intertwined with the country’s economy, tourism, consumer psychology, the sense of security, and the investment targeting of the global community at any given time in the country that has or creates investment opportunities. By the term ‘investment in real estate’ or ‘investment real estate’ we mean: Property purchased for the purpose of obtaining a return through rental income and the creation of added value from the future resale of the property, or both.

The reasons for investing in real estate are mainly because real estate can minimize the risk of investing and enhance the return profile of an investor’s portfolio by offering competitive returns tailored to the risk. In addition, when investing in real estate we have low volatility in relation to stocks, bonds, and other financial products, and clearly, real estate investing is now more attractive compared to other traditional sources of income, such as interest on deposits and pension insurance programs.

Demand for real estate across Europe has skyrocketed during the pandemic, mainly in residential real estate. Based on the ΕΚΤ [Greece’s National Documentation Center] demand will remain high and therefore upward trends in prices are expected.

For newly built properties, the increase in prices for construction materials is already intensifying this market trend.

Money is invested in many types of real estate, but primarily buyers want to meet their personal needs for a home either as a primary or secondary residence. Then there are investments in real estate with a long-term or short-term character.

The most common option is real estate that is purchased for rent as a monthly income.

The landlord is asked to be careful about the amount of rent so that he can cover tax expenses and generate a reasonable profit, covering the loan payment in full, if there is a mortgage. Essentially, a buyer wants to keep pace with the overall picture of the market. Definitely an important factor is the surplus value it will acquire in the future.

Based on the quality of each renovation, as well as the time it takes to complete the renovation, the property can prove to be a longer-term investment. In recent years, with the advent of short-term rentals such as Airbnb, there is a trend in the market towards older apartments, mainly 30-120 square meters, or apartment buildings or stand-alone commercial buildings where it is possible to change the use for the purpose of renovation and resale either as vacant buildings or for leasing.

In Attica, now almost the entire Historic Centre and other areas around the center of Athens are of great interest for this use.

Usually many such properties are available on the market, mainly furnished.

Every investor should understand the current market situation or turn to a professional broker with market knowledge to advise him properly.

There is a strong interest in buying real estate through auction. The process of acquiring property through auction is subject to a specific legal framework. It is an alternative way of buying investment real estate that is more economical than the free market.

The parameters of a profitable investment are complex and take time to realize.

Greece belongs to the 13 countries on the whole planet that has an established ownership status. The philosophy of life the Greeks is inextricably linked to property ownership.

If we follow three golden rules we increase the likelihood that we are making the right purchase:

  1. Short-term investments concern real estate that is bought and sold for profit. This type of investment can be combined with finding a tenant and being sold as rented.

The market in recent years is moving toward the so-called ‘flipping’ mentality. Real estate purchases are made either in significantly undervalued areas or in developed areas that have matured in recent years with high demand and usually low supply. Usually the resale takes place within four months.

These investors usually do not invest money in remodeling or upgrading. Usually, this buying and reselling is a more direct investment in cash.

On the other hand we have investors who generate income from real estate.

They usually buy at cheap and reasonable property prices and add value by selling them at a higher price. We have to look at the comparable offerings that exist in the area and the type of property that is chosen when it comes to investment property.

  1. The location of a property is the most important criterion in an investment, as it enhances the performance of the property. Investors tend to choose an area with low supply and high demand for rents. An important criterion is access to public transport, the distance from the Metro as well as the proximity of the properties located nearby, universities and schools (public and private) are important factors. Of course, we must carefully consider the supply and demand in the local market.

The management of the real estate for short-term leasing is undertaken by either an individual or a real estate management company at a corresponding cost.

  1. Every buyer must take into account the quality and other characteristics of real estate that maintain a constant value over time due to their uniqueness. In this category of properties are: the properties that offer views of the sea or the Acropolis, and penthouse apartments mainly in the center of Athens. The supply of these properties is usually limited and the demand is particularly high.

The last two years have seen a strong demand for furnished properties in the northern and southern suburbs and in the Historic Centre of Athens for executives of multinational companies who choose to relocate and work in Greece via telecommuting. This trend is increasing due to superior weather conditions, the quality of life, and lower cost of living.

The tourism sector is a key pillar inextricably linked to real estate. Remarkable amounts of money have been invested in the purchase of hotels or real estate that can be converted into hotels in the Centre, on the beachfront, and on many islands in the Ionian and the Aegean seas, on Crete and Halkidiki.

Investment opportunities are available on many Greek islands. Greece is in a competitive position and has comparative advantages over other countries in terms of tourism assets (climate, sunshine, many mountain ranges, an endless supply of islands, delicious and healthy food). It is a suitable country for investments in all alternative forms of tourism such as: Spa tourism, Medical tourism, Incentive tourism, Conference tourism, Agritourism, etc.

As tourism is constantly being upgraded, our Greece holds a high position among international preferences and in large markets such as the United States. Tourism in the city of Athens has increased overnight. In the real estate market, it is observed that projects that have recently been launched – the massive Hellenikon development (which will combine recreation areas, commercial areas, restaurants, residential complex, casino) and established attractions sich as the Stavros Niarchos Foundation Cultural Center, the marinas, the reconstruction projects in Piraeus such like the Papastratos complex, the expansion of the Metro – contribute to the increase in investments.

The last decade has also seen many investments in the purchase or lease of land parcels for the construction of photovoltaic and hydroelectric facilities and wind farms.

The state is trying to stimulate investment activity by creating tourism infrastructure projects. Also the tax code is becoming more attractive with the new legislative measures for foreign investors. In addition, the state system is in the process of the full digitization of real estate, which will significantly reduce bureaucracy and time to complete a real estate purchase. All the above contribute to the increase of investment flows in real estate.

Eva Deligianni is a real estate broker since 2006 and works at Zed Real Estate in Vyronas, Attica, which is actively involved in the field of purchase and sale of residential, investment real estate, and hotel units. Contact telephones: 212 105 9847 and 693 925 7713. Available on Viber and WhatsApp. E-mail: info@zedrealestate.gr.

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