Buying property in Athens

Why Athens?

When you want to invest in another real estate market outside of your home there are always risks. In 2016 we knew that when we started coming down to Athens, Greece to check out the worst property crash in Greek history.

We heard from our friends on the ground that some prices had fallen up to 70% – in fact to the point where it was cheaper to buy than to build.

The Greek crisis has complex roots but basically in around 2011 the country rarn out of money, its banks were under-capitalized and had to to stop lending and their balance sheets were full of more non-performing loans than the worst US subprime lender of the Global Finance Crash (GFC).

Where did that leave Greek property owners?

Well the Greek situation was really different from the USA or UK in the GFC because Greece has one of the highest percentages of home ownership in the world. Around 86 pc. So for a while the Greeks were OK. Sure they couldn’t buy or sell properties but most of them had one. In fact around half of them had several, so their families all had places to live.

Then in 2016 the government introduced something unthinkable for any previous generation of Greeks – a tax on owning property. That’s right, what the rest of the world has been paying for years, the Greeks now had to pay too. Not even a lot of money, but coupled with the crisis and salaries being slashed for many workers even a few hundred euros a year was unthinkable for them.

So the Greeks started to try and bail out of properties. This was a new kind of distressed market, the highest percentage of sellers compared to buyers we’d seen anywhere in the world over the past 30 years. Prices fell to rock bottom.