Before the pandemic arrived in Europe for good, Greek real estate was experiencing the beginning of an economic growth.
Everything started from the foreigners (agencies, investors and individuals) who detected the financial potential of Greek real estate.
The main reasons why Greek real estate attracted people from abroad were:
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Property prices had pressed up to 30% after a long economic crisis.
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A very attractive residential program based on property purchase (golden visa program) was running the same period in the country.
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Big construction projects were a forerunner of real estate growth.
Domestic demand came a little later and the main factors that mobilized it were:
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Announcement of the abolition of VAT for three years for properties with permit after year 2006.
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Banks started to provide housing loans with good terms.
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Prices started increasing dramatically and that caused pressure to Greek candidate buyers.
Unfortunately life is unpredictable and nowadays Greece faces two major problems that no one could predict some years ago, namely:
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Covid -19.
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Turkish provocativeness.
In March 2020 the pandemic hit Europe really hard. In the beginning Greeks managed to deal well with it, reacted fast and locked down the country before the pandemic spread all over. Earning positive feedback from the global community, Greece was considered to be, during the first pandemic wave, a safe country to live in. However that could not last forever. Greece’s main industry is that of tourism and after 10 year of economic crises the country could not afford losing the summer season. Finally, the country’s borders opened gradually and measures against the pandemic relaxed, increasing the spread of covid-19.
Considering that the country cannot apply again a catholic lock down in combination with the fact that the extent of the pandemic is unpredictable, the country is inevitably vulnerable until the moment an effective vaccine is discovered.
A second major issue for the country at the moment is the Turkish provocativeness. The problem between Greece and Turkey concerning the exploitation of Aegean undersea oil fields seems to be on a yield point this period. Especially lately, as the Turkish economy is collapsing, the political aggression is on the rise. Turkish look ready to carry out their threats and Greeks to fight back. It seems that as long as a mutually satisfactory solution is not on the table, the future seems precarious and this is no good for both the economy and the real estate.
Greek real estate is a bit frozen this period as expected. Candidate buyers are waiting to see how things will turn out before they invest their money and if we take a look at the graphs real estate’s previous significant raise has slowed down the last semester.
However if we examine the situation from another point of view things can be interpreted differently.
Covid -19 is a global problem and that is important for two main reasons, which are:
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Greece gained a comparative advantage since the country proved capable of managing effectively a universal pandemic and this is the reason why is considered safer, compared even with more developed countries.
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Covid-19 as being a global problem has united all the nations against the virus. The entire scientific community works hard in order to find an effective vaccine. This strengthens the belief that the medicine will be ready very soon.
Turkish provocation may not be exactly a global problem but Greece is not alone in that: a war is not very likely to happen because it is in anyone’s interest.
From the military point of view, Turkey may be a regional power but also Greece is a well-organized nation, heavily armed with huge deterrent fire force. All weapons are oriented to defense and the military staff is well trained. Also Greece has entered to alliances with the rest eastern Mediterranean counties by creating common interests in the area. A conflict between them would be very dangerous and costly.
From the political perspective a war between Greece and Turkey is very bad too. Victory is not certain and a possible defeat could be very painful in many ways for both countries. Moreover the European Union does not desire a conflict either. Firstly Turkey controls the flow of migrants to Europe and secondly many strong nations do business and trade with Turkey. On the other hand Greece is a member of European Union with the euro as its currency and is connected in several ways with all European countries. If Europe do not react as a union, protecting its members, will cease to exist.
Concerning Greek real estate, this critical period is ideal for survey but if you find what you are looking for do not hesitate to purchase your property. The real estate market may be frozen a bit for now but it is more likely things will get back to normal soon and prices will increase rapidly!!!!
Anyway …If things turn bad either with Covid-19 or Turkish provocativeness … the least of your problems will be your new property.