Foreigners doubled their investment in Greek property, mostly holiday homes, in the first half of the year compared to the same period in 2013, Bank of Greece data show.
In the period from January to June 2014 a total of 117.4 million euros flowed into Greece to that end, compared with 60.3 million a year earlier, reflecting the clear improvement in the holiday home market, at least as far as foreign buyers are concerned, as they are cottoning on to the bargains currently available in Greece.
Holiday home prices in Greece have dropped more than 40 percent since the start of the crisis six years go.
Demand has soared to such an extent this year that it eclipsed the sum of all investment for the whole of 2012 (113 million euros) in the first six months. Foreign interest in the local market started to become evident last year when they invested 168 million euros – 48.5 percent more than in 2012. And this year’s growth would have been greater had the market not had the cloud of its unstable tax status hanging over it. Transactions were significantly reduced in the first five months of 2014 due to the unclear application of the capital gains tax on properties, forcing many investors to postpone their purchases.
Real estate professionals attribute the growth of the holiday home market not only to the drop in prices but also to the constant increase in tourism arrivals and to government measures that have made transactions more attractive, such as the reduction of the transfer tax from 8-10 percent last year to 3 percent now, and the concession of a residence permit to non-European Union buyers who buy properties costing 250,000 euros or more.
All this is generating optimism that the stock of unsold holiday properties, estimated at around 30,000-40,000 across the country, may gradually be absorbed, which would go a long way toward helping the property market in general.
Demand has centered around the Cyclades islands, led by Myconos and Santorini, while other popular choices include Crete, Rhodes and Corfu. Prices vary greatly depending on the region.