Foreign buyers are lining up to invest in real estate in Greece, a market that crashed during the country’s economic crisis and has yet to fully recover. Prices dropped by around 45 percent though real estate agents say in some areas of Athens the real drop reached close to 60 percent.
But it’s not only the cheap prices that make Greek real estate appealing to foreign investors (much cheaper than other European countries like Portugal, Spain, Italy and Germany). Greece’s residence-for-investment program, introduced in 2013 and one of the cheapest in Europe, has been luring thousands of foreign buyers who, when they buy real estate property worth at least 250,000 euros (292,625 US dollars), get a five-year residence permit that also allows them and their families to freely travel in most of Europe.
A neglected house in the now trendy area of Koukaki in downtown Athens. /CGTN Photo
Chinese buyers are the top nationality applying for the so-called “Golden Visa Program.” According to data from Enterprise Greece, by the end of 2017 Greece had granted 2,305 “golden visas.” Chinese investors make up almost half of all investors having been granted 1,011 visas, followed by those from Russia (395 visas) and Turkey (222 visas).
The remaining visas were granted mostly to nationals of Middle Eastern nations. Seventy percent of investors bought properties in Athens and the surrounding Attica region, where demand for short-term rentals from online platforms has been rapidly gaining ground and is fueled by Greece’s booming tourism industry. It is an investment that gives foreign buyers immediate and strong returns on their Greek properties.
Chinese interest in Greek property began rising in 2016 when buyers from the world’s second-largest economy felt that the worst for Greece’s economy was over. According to Enterprise Greece, in 2017 there was a 33-percent increase in “golden visas” compared to those issued a year before. And the trend continues to go upwards.
“The Chinese are quite careful when they buy something; they study what they will buy,” says Lefteris Potamianos, president of the Athens and Attica Real Estate Association.
He says it’s not only that Greece is a beautiful and safe country that makes it an appealing real estate investment destination. It’s the prices, he says, that hit rock-bottom with some apartments in the center of Athens selling for as low as 10,000-15,000 euros. Yet, he doesn’t expect that trend to continue as foreign investments in Athens’ real estate seem to have contributed to a spike in prices.
“Some areas in downtown Athens used to cost way below 1000 euros/square meter and now or in a few months, it’s difficult to say that something will be less than 1000 euros,” he says.
A short walk from the Acropolis, the densely populated area of Koukaki has been attracting foreign buyers like a magnet. /CGTN Photo
So more Chinese buyers are rushing in. Peter Chang, who has been living in Greece for almost five decades and is the owner of a travel agency in Athens, says in fluent Greek that he gets up to 100 inquiries a month from prospective Chinese property buyers, up from about 60 last year, though in the end, less than 10 percent of them end up applying for the visa residency program.
He works directly with Greek real estate agents and helps Chinese buyers navigate the process. He arranges everything for them, from their stay and car rental to their dinners and charges a fee for the service, which he returns to the buyers if they end up buying the property and instead charges them a commission. It’s not just the language barrier that he says turns some Chinese to him for help in their quest to buy property in Greece. “I am Chinese,” Peter Chang says.
“Chinese people, we are bound together, we have the same culture. When they come here, we take them out to dinner, we keep them company, and we give them a gift.”
Though he believes the residence visa is the primary reason why his compatriots invest in Greek property he also agrees the cheap prices are a major draw. “For the Chinese, in Beijing, in Shanghai with 250,000 they cannot even buy a parking spot. It’s very expensive.”
Peter Chang says he has so far helped Greek real estate agents sell over 200 Greek properties to Chinese investors via the “Golden Visa Program.” /CGTN Photo
According to the Bank of Greece, during January of 2018, foreign capital flows skyrocketed by over 205 percent. It’s the biggest yearly turnaround, even compared to 2017, which, according to analysts, has so far probably been the most dynamic year in foreign investment in Greece’s real estate market. Moreover, foreign funds with liquidity averaging a total of 1-2 billion euros are also eyeing Greece’s real estate market, aiming to buy dozens of properties – from homes to offices to commercial spaces.
As more and more foreign buyers acquire property in Greece and especially in downtown Athens, Lefteris Potamianos hopes these investments will work for the benefit of the Greek capital. “For many years, the center of Athens, and the historic center of Athens, has been the only center of a European city that was in a really bad shape. Neglected buildings, little infrastructure,” he says.
“When a lot of money comes in a city, the general landscape changes. If all these investments pan out, the buildings will change shape, streets will be turned into streets for pedestrians. All this contributes to a different kind of development so that Athens also becomes a modern European city, where real estate prices will also be high, like the rest of the world where the highest prices are in the center of a capital. Here it has been the opposite.