House prices in Greece have been dropping for the last seven years, albeit now at a slower pace. This raises the question of whether it is worth investing in Greek real estate, at this time.
Athens is an attractive market right now; one can buy apartments in Athens for as little as EUR 19,000-33,000, renovate them for EUR 5,000 and generate almost EUR 1,000 per month if renting to foreigners. If the weekly rental prices is EUR 400, that translates to rental income equal to almost EUR 20,000 per year.
On the other end of the real estate spectrum are the expensive properties. In order to revive the housing market, the Greek government offers residence permits to non-EU investors purchasing property worth more than EUR 250,000. The residence plan, which is similar to measures adopted by Hungary, Spain and Portugal, is valid for five years and open to renewal.
This approach has been met with increased demand and many properties are being purchased at a healthy rate–in particular many purchases by Russian investors can be noted.
There is a twofold reason for this investment, the first one being the 50% drop of prices for luxury properties since 2009. The second reason is the fact that Russian investors are looking for places to invest, away from Russia’s own current economic crisis in order to protect their holdings. The relations between Russia and Greece are actually quite strong with a $2.27 billion gas pipeline being built to supply Greece with Russian gas. So, it is not surprising that many Russian investors are taking a particular interest in Greece, where they have invested heavily in the past few years in the manner they did in London and other places across Europe and the US.
Additionally, Chinese investors are also increasingly beginning to knock on the Greek real estate door. The number of Chinese investors is now close to the number of investors from the US and North Europe, and – per Frankfurter Allgemeine Zeitung – may have reached 15% by now.
Chinese interest is related to various investments in Greece whereas investors from the United States are propelled mainly by tax incentives.
Of additional interest is the reduction of the Greek real estate transfer tax from 10% to 3% as well as the ability of EU (& recently UEA Companies) to avoid tax obligations arising from possessing real estate in Greece if the ultimate individual beneficiary has been issued a Greek tax ID. For more information about this incentive, be sure to read our related article.
Konstantinos Sakkas
Chief Accountant
Athens, Greece
Tel: +30 210 8257722
E: kostas.sakkas@eurofast.eu