Every time we move into a broken property market we have to look at what occurred and where the opportunities lie ahead and why
All property markets moved thru different cycles but sometimes an event happens that although initially causing chaos also leaves behind great opportunity
During the 2008 crash Greece debt levels became extreme and they required to be saved by the international banking system that was not prepared to financially assist Greece unless unless major structural improvements were made as to the way they ran the country
As a result, wages halved and the ability to borrow money became nearly impossible and job losses occurred as well as an inability for the Greek nationals to see a way forward further deteriorate consumer confidence and a belief they may be removed from the EU
Property prices fell too far and when falls become so extreme that it’s cheaper to buy than to build it becomes obviously the indicator to move into that market to buy and hold well placed properties
Over the decades it has proven that as countries get into financial difficulty only to purchase within the inner circle of the major internationally known cities or along the coast as these areas always recover the quickest.
The only exception to this is where the downturn has created a shift in an areas demographic which may slowdown recovery
Within areas of Athens prime locations have been affected by a change in demographic bought about by tumbling property prices.
With tourism now being Greeks major source of income with 30million tourists a year flocking to a country who’s population is only 10 million a short trip to the Athens dept of economic law and planning reveals 4 new approved 5 star international hotels for central Athens to assist in accommodating the tourist overload.
And cities that rely on tourist income quickly regenerate downtrodden sections as it can be bad for business
How fast is the comeback gonna be?
This gets debated daily but we only need to see the recovery speed of Lisbon to recognise that Athens square foot rental space fell to 50% of other European cities and now with new infrastructure including airports railways internet etc etc … its not going backwards.
We will continue to acquire properties in Athens until the cost profit ratios no longer make sense and move into either other markets like Italy or Australia – two markets to keep an eye on!
Different countries have different levels of home ownership and Greece traditionally had the highest in the world at over well over 80%.
For Greeks it was normal to not only own several properties as it was always the mantra ‘never sell, but hand them down thru the family over the generations’.
Therefore quite often you are not dealing with one seller and it’s important you know prior to a negotiated purchase who else needs to be at the meeting or you may be surprised who appears later to upset your deal.
The Greek crises was one in a country that had never seen a downturn in property prices and therefore this downturn rocked the fabric of their society and now many do not trust government or the banking system and will always want to operate with side agreements and cash being wired into offshore accounts …. our experience is a property transaction will always have ongoing issues especially later on when the game has moving goal posts from the beginning …
It is part of the culture not to pay taxes and is seems it was the national sport before the lack of taxes paid crashed the economy so don’t be surprised if the conversations sometimes turns to operating in a way that is foreign to you…I suggest you don’t do it as Athens will be very profitable just being boringly normal ( just look at the growth of Lisbon).