The crisis in Greece: is the time to buy real estate





07.06.2010 13:01
How cynical this sounds, but the crisis - is a perfect time to invest in real estate - but not all. Of course, the housing market foreign buyers attracted by the country`s first resort with undoubted potential.

The fiscal crisis of Greece made this country great advertising - stories about her not disappear from television screens and newspaper pages. Greek real estate market is still very active, including through a price correction occurred, and the Russians, for the year surpassing the Germans and British, have become one of its main driving forces.

Surprises crisis

It is interesting to see how varied the tone of comments of economists. A year ago, experts claimed that Greece will survive the crisis almost better than other EU countries. Revaluation of property began in October, after coming to power a center-left Party of PASOK. The real budget problems, hitherto successfully concealed, were very significant: external debt is estimated at $ 300 billion

In November it was announced that Greece is the highest in the EU`s budget deficit: fiscal expenditures have exceeded its income by 12,7%, while the European Central Bank set the 3% limit on budget deficits. In December, the rating agencies downgraded the sovereign rating of Greece, began to talk about the possibility of default of the country, the risk of its withdrawal from the euro zone and even the beginning of the collapse of the EU.

The rescue cradle of democracy

It was obvious that the Greeks will have to tighten their belts, but to do so they do not want, as regularly reported to the authorities on large-scale protests. According to the population, the causes of all evils - the introduction of the single European currency and the policy bankers.

Meanwhile, the EU was in no hurry to help Greece, claiming that other countries and their problems enough, and if the Greeks like to live beyond their means, it is their personal business. To solve the problem by typing the money (as does the United States), Greece, too, can not: control the emission of the ECB.

Finally, in late March at the summit of EU member states have found a compromise by providing 22 billion euros, Greece will be able to obtain in the case of extreme necessity. One-third of the sum will provide the IMF, and that means tough measures aimed at reviving the economy. The main thing that gets Greece, - not even money itself, but the fact that thanks to this "safety cushion" Banks should stop speculating on the theme of the budget deficit and reduce national debt refinancing terms.

With all this "political information" means for a potential buyer of real estate? The conclusion is simple: it`s time to buy. Experts believe that the collapse of the real estate market in Greece will not be all negative expectations already reflected in the cost of housing, although it is possible that the price correction will continue.

Draw conclusions

As for the real estate market, the first alarm bell rang out around May 2009, and he touched the market holiday homes. Economic Newspaper "Imuris" then stated that the demand for property in coastal areas hit by 50-60%, while prices fell by 10-25%. 60% down demand for summer rentals. Hardest hit the island of Crete, Rhodes and Karpafos. The problems began, and the developer - in particular, Cretan company Hellenic Homes began bankruptcy proceedings.

However, a year ago, this did not attach any special significance, because the construction business in Greece does not play a key role in the economy, such as in Spain. For the year 1000-2000 is for sale only "second homes", 50-60% of whom bought by foreigners. Therefore, the country`s problems are connected with the budget deficit, but not with the real estate industry.

Oddly enough, loud and popular unrest associated with the budget deficit, very little impact on prices. "The market housing is not too hard by the news about the deficit budget. At the moment, with property developers has become easier to bargain only because of the fact that in 2009 the purchasing habits of foreign investors was not high", - says Vladimir Khanukaev, president of Greece. ru Property Development SA overall decline in property prices in 2009 amounted to about 10%.

Anna Lysova, a representative of AG Properties in Russia, confident that the Greek real estate will always be in demand. "By the way, - she says - the well-known Trump Group, which specializes in transactions with distressed assets, is now closely studying the properties of Athens and the Greek islands, and a group of Dolphin Capital Investors is preparing to invest about 3 billion euros to the Greek tourism market and real estate luxury. So make your conclusions, gentlemen! "

Russian in line with

Greece is attractive because, on the one hand, real estate is much cheaper than in Spain, Italy and France, on the other - the quality of life higher than in Bulgaria, Croatia and Montenegro. Characteristically, the spa houses are happy to buy and own the Italians and the French, but the main buyers of Greek real estate, as noted by Anna Lysova - this is British, Germans and Russians.

Vladimir Khanukaev said: "Europeans are more like small islands, the Russians prefer to Halkidiki and Crete. Demand for Greek property by the Russians is growing thanks to low prices, convenient air service, transparency of legal procedures for registration of property, and, of course, the natural beauty of Greece and its cultural Relations with Russia.

In order to completely open the resort potential of Greece, the government has been actively stimulated the development of tourism infrastructure and created favorable conditions for investments in large hotel complexes, health and spa facilities, convention halls, business centers, ports and harbors. For example, according to Anna Lysova, "express authorization" for the construction of large investors are processed within 100 days, the government was prepared to subsidize in various years from 50 to 60% of the cost of some projects, which made a profit of 200-500% of the cost of construction . In connection with the budget crisis, this program had to be suspended in early 2010 - probably for a period of about six months before the situation becomes clearer.

Tastes and wallets

Despite the fact that the advertising is dominated by very expensive items from 5000 euros per 1 square. m, in Greece, easy to find affordable housing and up to 2000 euros per 1 square. m, but the available supply should be considered very closely. It concerns the legal side of things, and the choice of the district. Thus, the center of Athens, the Greeks themselves do not believe for a comfortable stay and prefer to settle in private homes on the periphery of the city.

In practice, companies AG Properties, most transactions take place within 300 thousand euros, and according to general statistics, the average price of real estate in Greece, acquired by foreigners - about 120 thousand euros.

Even with a budget of up to 100 thousand euros you can find decent apartments of 70 square meters. m - for example, in Crete. Choice and in the elite segment of the Greek real estate market. In August, according to press reports, for the right to own private island of Scorpios (the previous owner which was a billionaire Aristotle Onassis) competed with Bill Gates, Roman Abramovich and Madonna.

The crisis with the benefit

Certainly, the crisis risks in the primary market buyers are growing, although the wave of scandals with "deceived investors in Greece can be expected.

Vladimir Khanukaev said: "Of course, there are construction companies that have difficulties, but this phenomenon is not widespread. Typically, coastal projects are implemented by small construction companies, which even in the event of a temporary slowdown in consumer activity can cope with such fluctuations in demand and avoid bankruptcy."

"In those cases when the construction companies have no debts and credits, they are in a quiet mode, even finish building luxury villas on the most prestigious resorts - adds Anna Lysova. - And the big Greek developers of a new" batch "recently active spend huge amounts on advertising and PR, can boast only arrested bank accounts, debts and the queue of creditors. " In general, the construction and real estate business in Greece was not much refinance.

Experts believe that now had a very favorable situation for the purchase of "second home" in Greece. Of course, PR is almost always full of optimism, but now have a reason to listen to their arguments. And AG Properties, and Greece.ru not predict a collapse or even a substantial reduction in housing prices in the coastal zone, but that for bargaining with the sellers have good reason. On some sites you can get discounts of 10-15%. Vladimir Khanukaev believes that by the end of summer, when developers see the stabilization of demand, the discount will be harder to achieve.

There are other factors that attract Russian buyers: in 2009 in Greece, it became possible to mortgage loans for the citizens of countries outside the EU. According to the company "Real Estate Services - Real Estate in Greece", available credit at a rate of 4,7% for up to 15 years, there are programs with the possibility of mortgaging real estate in Russia.

But for the vast majority of Russian property buyers in Greece the main argument remains the climate and the amazing beauty of its coastline and islands. The Greeks themselves - people are noisy and sparkling and festive part of the Russian soul feels in this Orthodox country like home. Therefore, for those who have already arrived in Greece, and fell for her charm, all the reflections on the right moment and the notorious investment attractiveness simply go by the wayside.

Pyotr Chernov
The Source: The magazine "Homes Overseas"

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