Greece News Digest: Light at the End of the Tunnel
Tranio experts are confident that now is the best time to buy Greek real estate, as prices have reached bottom and are ready to grow (according to the Bank of Greece, since the 2nd quarter of 2017, the cost per square meter in Athens stopped falling). Not only we see positive changes: the editors compiled a digest of the main news about the Greek economy, published in the first three months of 2018.
In January, the CEO of Deutsche Bank, John Krayan, gave an interview to the Greek edition of Ekathimerini, in which he expressed his point of view on the state of affairs in Greece: “At last the light is seen at the end of the tunnel. The forecast for 2018 remains positive, but the road to full recovery will be long and difficult. ” According to him, the success of Greece in the long term will largely depend on its willingness to cooperate with the EU.
A month later, the international rating agency Moody’s raised the rating of the issuer of Greece from Caa2 to B3. Analysts believe that the country will successfully complete the third support program and return to self-reliance and market financing. According to Moody’s, the risk of a subsequent default or restructuring of debt to private investors has decreased significantly.
In early March, the Statistical Office of Greece published data on the dynamics of Greece’s GDP in 2017: after an eight-year recession, Greek GDP grew four quarters in a row. From October to December 2017, growth in current prices was 2.4%. According to the forecasts of the European Commission, the economy of Greece will continue to grow in 2018 and 2019 by 2.5% per year.
On March 27, the European Stabilization Mechanism (ESM) approved Greece’s release of the fourth tranche of financial assistance in the amount of 6.7 billion euros. As noted in the message, this decision was made due to the fact that the Greek government has implemented the necessary reforms and has taken the required cost-saving measures. The head of the ESM Foundation, Klaus Regling, expressed confidence that Greece will quit the foundation’s program in August 2018.
Some experts are cautious: for example, Phillis Papadavid, a macroeconomist at the Overseas Development Institute, writes in his column at Bloomberg: “Europe is unlikely to agree to forgive a large part of the debt because it doesn’t want excessive borrowing to happen again in the eurozone . With the debt-to-GDP ratio of 176% and small prospects for accelerating growth or increasing healthy capital inflows, investment in Greece remains an option not for the faint of heart. ”
Greece is experiencing a tourist boom: according to the Association of Greek Tourist Enterprises (SETE), in 2017, the largest Greek airports recorded 18.3 million international arrivals – by 8.6% than in 2016. According to statistics from Athens International Airport, from January to March 2018, their number was 2.7 million, which is 15.9% more than a year ago.
According to the Bank of Greece, Greece’s revenue in the tourism sector in 2017 increased by 10.7% and amounted to 14.6 billion euros. As Bloomberg writes, quoting the words of SETE president Yannis Retsos, in order to increase this number to 20 billion euros by 2021, it is necessary for Greece to attract 6 billion investments a year.
Especially active tourists from Germany. According to Ekathimerini, citing data from the German research company GfK, as of the end of January 2018, the Germans booked summer trips to Greece by 40% more often compared to the previous year. Greece is named the most popular holiday destination for German citizens.
According to The Washington Times, citing data from the American Enterprise Institute, since 2008, Chinese businessmen have invested almost $ 9 billion in Greece, which is equivalent to about 5% of Greek GDP: “Unlike many European countries, Chinese investors looked at the economic crisis in Greece is not like a catastrophe, but an opportunity. ”
Foreign investment in real estate is growing rapidly. According to Ekathimerini, in 2017 their volume reached a historic maximum: 503 million euros. According to the Bank of Greece, the total value of transactions that foreigners entered into the Greek real estate market in 2017 is 86.5% higher than in 2016, and the volume of transactions concluded only in January 2018 is 205% more than in January 2017 of the year.
Consulting company Danos published a report on the Athens real estate market for the second quarter of 2017: analysts state an increase in demand for low-cost offices in the city center and explain this by the fact that investors are rebuilding them into small hotels or apartments for renting to Airbnb portal for short-term rent.