Residence permit in Malta, how to get citizenship of Malta, visa
Residence permit (permit) in Malta: for the investment in the purchase of real estate. How to get citizenship of Malta to a Russian or a resident of another country. Malta…

Continue reading →

Afghanistan's real estate market: chaos and uncertainty
Afghanistan, torn apart by internal strife for decades, is still home to nearly 30 million people. More than a third of them (according to the World Bank for 2014) live…

Continue reading →

Protests in Iran could trigger an increase in demand for property abroad
Mass protests in Iran at the end of December provoked a growth of interest among local residents to foreign real estate: in particular, to the UK, Canada and Turkey. A…

Continue reading →

Why property prices in Greece will grow?

Greece is one of the last real estate markets in Europe, where the monetary “drought” continues and the market has not started to grow since 2008. Athens real estate prices are 42% below pre-crisis levels.

Changes in property prices in Europe

Today a square meter in Greece is several times cheaper than most neighboring countries: according to Statista, one and a half times cheaper than in Spain and Germany, two times more than in the Netherlands and Sweden, and almost three times less than in Italy and Austria.

A logical question arises: why? How are real estate prices formed?

The global financial crisis that began in 2008 and the internal problems of Greece related to the state budget deficit and the payment of foreign debt exceeding 145% of GDP by 2010 resulted in an economic collapse across the country. Moreover, the foundation of these problems was laid long before the economy of Greece entered the acute phase of the recession in 2010. The government distorted its own economic statistics to hide the real budget deficit by publishing “acceptable” data on the deficit of about 3% of GDP. This allowed Greece to pursue a policy of active borrowing, with the help of which a real gap in the budget was covered. The consequences have become drivers of a sharp fall in real estate prices and led to the “collapse” of the real estate market.

1. The fall in real income
The crisis hit all sectors of the economy, began a series of bankruptcies of enterprises and layoffs. If in 2008 the unemployment rate in Greece was only 7.6%, then by 2013 it had risen to 27.8%. According to Statista, the average level of income in Greece reached bottom in 2013, from 2009 down 22% to 17.4 thousand euros per year.

The problems associated with the payment of public debt, forced the government to cut government support programs, subsidies, salaries to state employees. according to Greekreporter, the number of people employed in the public sector decreased from 936 thousand in 2011 to 567 thousand in 2016.

2. Problems in lending
The aggravation of the situation in the global capital markets forced investors to pursue a more restrained policy, even for large institutional borrowers, such as other governments. Against the background of the outbreak of the scandal with the falsification of state statistics, investors had even more serious concerns about the ability of Greece to fulfill its obligations. Such a reassessment of risks led to the sale of Greek debt securities, raising their return to almost 40% in 2012.

The negative development of the state debt situation quickly affected liquidity in Greek markets. Sales affected the sector of Greek corporate bonds, raising their profitability and increasing significantly the cost of business lending. The multiple increase in interest rates in the corporate sector has made retail and mortgage lending less affordable – as a result, there are fewer real estate purchases.

3. Tax increase
To reduce the budget deficit, the government was forced to raise most taxes. As a result, disposable incomes have fallen even further. If in 2006 taxes in the total income of an individual in Greece amounted to about 27%, then by 2014 this figure reached a value of 34%, which negatively affected the purchasing power of the population.

In parallel, taxes on real estate increased, including taxes for non-residents that were raised almost three times.

Tax amount in Greece
4. Emigration
According to Greek media reports, since 2007, more than 5% of the indigenous population of Greece (about 500 thousand people) left the country in search of a better life, which also weakened domestic demand for residential real estate.

The combination of these factors led to a sharp drop in demand, as a result – the number and volume of transactions in the market decreased. Thus, according to PwC, the number of real estate transactions in Greece per 1,000 objects from 2008 to 2014 decreased by 72%, and the volume of one transaction fell from 158 thousand to 45 thousand euros.

Real Estate Transactions in Greece
1. Housing oversupply
The real estate market in Greece experienced a “boom” in the early 2000s: fueled by rising mortgage lending, it became one of the main sectors for investment.

From 2002 to 2007, the volume of affordable housing in the market grew by about 1.5% per year. Even after 2008, when the pace of construction slowed down, new construction projects continued to be launched on the market.

Today in Greece there are about 6.4 million residential properties, about 71 housing units per 100 people, or 1.7 per family. For the EU, this figure is lower: according to 2014 data, there were 60 properties per 100 European residents.

2. Realization of mortgage property
The current economic situation has led to people being unable to repay loans received earlier. The share of non-performing loans reached a critical level of 51% in 2015.


Property Maintenance in Greece
The maintenance of an apartment in Athens costs on average from 700 to 1.8 thousand euros, villas on the islands - from 1.5 to 15 thousand euros. The main items…


Self-governing mobile homes: how unmanned vehicles will change the real estate market
Self-governing transport is already a reality. Driverless taxis drive around Pittsburgh, San Francisco and Singapore. In Colorado, the first delivery was made by an unmanned truck, and in London an…


Barcelona real estate market: 2 months after the split
The last few years the real estate market in Barcelona has experienced a boom. in 2013, prices reached the bottom and began to grow rapidly: according to the portal Idealista,…