In recent years, many European countries have become awash with cheap money: mortgages covering 80% of property value for residents and 50%
One of the few exceptions is Greece, where the financial drought continues and the property market has not recovered since its crash in 2008. if the European Central Bank (ECB) maintains its monetary policy (and there is no reason to assume the opposite), it is very probable that capital would reach this country as well. Demand from foreign investors is currently being fuelled by cheap
The market of property in Greece is heterogeneous. Locations like Mykonos, Rhodes and Santorini, for example, are already alive and kicking – local hotel occupancy rates run
Athens is very likely to become the next Greek city to witness another period of growth in the real estate segment. For this to happen, a number of preconditions are already being fulfilled:
1. Economic recovery
Athens is the economic centre of Greece, generating 19.9%
The general decline in the national economy, which began in 2008, is now slowing down. According to the International Monetary Fund (IMF),
According to the IMF, unemployment in Greece declined from a record 27.5% in 2013 to 21.5% in 2017. Trading Economics expects this figure to shrink to 18.8% by 2020.
2. An increase in the number of tourists
According to SETE, the number of international tourists visiting Athens almost doubled between 2012 and 2016, growing from 2.6 million to 4.5 million
Overall, this is a good time for
According to MasterCard, Athens is among the top 20 European cities in terms of number of international tourists spending a minimum of one night at their destinations. Prices are relatively low there: according to 2016 data from global hospitality industry tracker STR, hotel rates in Athens are lower than tourist hubs like Paris, Rome, Barcelona, Amsterdam, London and Dublin.
3. Low prices with a potential for growth
Property in Athens is cheaper compared to many other European capitals: about thrice cheaper than Lisbon, Madrid and Berlin, five times cheaper than Vienna and almost eight times cheaper than Paris.
Local prices are well below
Today, residential properties sell almost at construction cost price in Athens. According to Numbeo, the average price
According to Trading Economics forecasts, property prices across the country will grow by 22% on average between 2016 and 2020.
What to invest in?
We recommend investing in rental residential and hotel real estate, as Greece will keep attracting tourists regardless of its GDP dynamics. Office, retail or warehousing properties are more dependent on the state of the economy, which still needs time to completely recover from the 2008 crisis.
An easy way into the market is to buy a flat that is ready for tourist lease. One of the advantages of Athens is that, unlike Berlin or San Francisco, the Greek market for rental residential property is loosely regulated. Obtaining a tourist license is enough to be allowed to rent out the property for short terms. This document is issued for 5 years and usually costs
Tranio offers flats in Athens listed on Airbnb, which have yields
A more complex but more profitable strategy is to participate in a redevelopment project. One can buy cheap real estate, make repairs and lease or sell at a higher price. The return on investment
Building new residential units is less profitable, as the demand
With Tranio, investors can redevelop a single flat. Tranio will manage the repairs and the subsequent
Investors can also take part in larger projects, such as the renovation of an apartment hotel (a hotel with serviced rental tourist apartments that can be bought separately, unlike conventional hotel rooms). In this case, the operator provides the building, while Tranio and the investor finance the repairs.
When the rental business starts operating, Tranio sells the apartments to foreign buyers seeking golden visas and rental incomes, and distributes the profits
A revival can already be seen in the Athens hospitality market. In the past two years, hotels belonging to several major chains, including Wyndham and Aman, have opened in the capital. In June 2017, Hines bought one