There’s talk everywhere online about the impending crash in 2019
Housing prices in mature markets in places like London, Vancouver and Sydney have taken a bartering recently.
This means that when we tell investors that we’re buying property in Athens their first reaction is usually- you must be crazy!
But is it really so crazy? Everyone knows the great Warren Buffett made all his money buying when the ‘experts’ said ‘sell’.
Property is a weird one. People behave in strange ways in the property market boom and bust cycles.
Here’s an example (borrowed from Robert kiyosaki). When you go to the supermarket and they have a BOGOF on your favroite cookies, do you buy more or fewer packets?
Of course you buy more. Doh!
So why is that when we talk of real estate markets we find people including investors it must be said, who stop buying when prices are low?
True you must be able to recognise where you are in the cycle. Buying in London in the last 18 months was probably not w great idea. The sellers still haven’t really felt the pain of a recession enough that the true prices have fallen to realistic levels. But they will.
So back to Athens. Will the athens property market crash again?
The property market in Greece (forget the islands) was at its worst point in history just a couple of years ago. In 2017 you could buy in Athens for less than the build cost. That is a fundamental and cannot stay that way regardless of how incompetent or communist a government is.
And so what we’ve seen is a slow return to cautious optimism in the market. The Greek government may be as bonkers as a bunch of bats in a belfry but the actual Greek people have grown so weary of the austerity and recession that there’s been a kind of reset button in the real estate market.
Buyers are beginning to invest. They see the problems in London or Sydney and know the prices are way over the top and yet to fall to their true levels. And then you have Athens where prices are still close to rock bottom.
The opportunity for equity growth is there in Greece. It may be that it takes a while. But meanwhile they yield on rents is looking pretty good when compared to any other capital city in the EU.
If the rest of the world suffers GFC 2 will Athens crash further? It’s hard to imagine it can. Especially if you buy in the right areas that are booming due to tourism.
We got the chance to buy an apartment in front of the amazing Acropolis Museum. It wasn’t cheap and unlike most of our deals we agreed to pay cash. (well not all in one go – that just goes against the grain). But this property was in a globally recognised area. Where tourism is flourishing even during the stormy January of 2019. There will always be tourists coming to see the sights. Regardless of what the Greek government does.
The price of that property was €4300 per sqm. Expensive by Athens’ standards but nothing compared to even Lisbon where a similar location would be €10-13,000 per sqm.
But move just a few streets from that apartment and you will still find bargains for around €1000 per sqm.
But they won’t be there for long if we can help it.