Greek think tank IOBE sees economic growth accelerating to 2.1% this year from an estimated 1.3% rate in 2017. The estimate is broadly in line with the official Greek government and Europe- an Commission forecasts, both of which see GDP growing at a 2.5% rate this year. Greece’s revised 2017 GDP data is due to be released in early March.
Leading U.S. electric automobile manufacturer Tesla is setting up an R&D facility in Greece to tap local scientific expertise in electric motor technology. The facility is expected to employ
Tourism in the Peloponnese is gaining momentum, which is driven by the area’s upgraded infrastructure, the development of thematic travel products and promotional activities run by regional authorities.
Kalamata City, Photo: mythicalpeloponnese.gr
Ermionida, Argolis Photo: G.Ktizein
More specifically, the area was recently included among the 50 best places to travel in 2018 by the Travel+Leisure Magazine, along with Buenos Aires in Argentina, Marrakesh in Morocco and the Fiji Islands.
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Domestic demand for housing is expected to be sluggish, since: (i) household disposable income is not expected to increase significantly in the near future; (ii) the unemployment rate is forecast to remain in double digit figure until 2030 (according to the European Commission, the 2015 Ageing Report, January 2017); and (iii) the extraordinary tax imposed on real estate property looks set to become permanent.
Given that domestic demand for housing is not expected to recover soon, it is worth exploring the potential demand originating from abroad.
Chart 22 shows that, in terms of value, housing in Greece is attractive compared to other Mediterranean countries though not to South – eastern European ones. However, according to the Global Property Guide, rental yields remain moderate and are lower than those in neighbouring countries such as Romania , Bulgaria and Cyprus.
In order to attract foreign investors, Greece offers a residence permit (valid for five years with the possibility of renewal) to non – Europe an citizens who buy a house worth more than €250,000 . In addition, in 2010 the real estate transfer tax was reduced from 10% to 3% on the property’s fair value. The above incentives resulted in partially revamping residential investment interest in 2016, with FDI for residential property increasing to €250 million from €186 million in 2015.
Overall, the recovery of the housing market in Greece is largely related to improving the investment climate and reducing tax burdens . Still, given that domestic demand for housing is expected to remain subdued, residential investment is not expected to support GDP growth to the degree it did before the economic crisis. At the same time, any demand for housing coming from abroad is directly related to the restoration of confidence in the economy.
Foreign demand for Greek real estate is soaring as overseas investors are drawn by attractive asset prices and amid signs the Greek real estate market has bottomed out after years of decline. Data show that foreign investment in Greek property has more than doubled since last year to well over €1 billion euros, while property-linked residency visas issued under Greece’s Golden Visa program are up by a third and recently surpassed 2,000 in total. The vast majority of foreigners are buying properties in and around Athens, say industry sources, with investors coming from China, Turkey, Russia, Israel, Egypt, Lebanon and the United Arab Emirates. After falling by as much as 50% from their pre-crisis peak, Greek property prices have now stabilized, data show.
Greek tourism is set for another record
year in 2017 with the country on track to welcome 30 million visitors. In the last three years, Greece has seen a sharp increase in investment in its tourism industry, which accounts for roughly a sixth of the economy and last year brought in more than €13 billion in
Over the next three to five years, more
than €4 billion are expected to be invested in approximately 200 tourism related projects around the country. “For 2017, the first signs of the market are positive,” according to a recent National Bank of Greece report, which estimates that the country needs some €22 billion in tourism-related investments over the next
TARGETED TOURISM INVESTMENT COULD INCREASE RECEIPTS BY 40% OVER 5 YEARS
The majority of revenues of Greek luxury real estate transactions acquired by foreign nationals remain in banks outside of Greece, sources have reported.
In fact, many of the Greek sellers are even prepared to travel abroad in order to close contracts and open foreign bank accounts where they then deposit their profits. A major motivation for sellers opening bank accounts when dealing with the luxury real estate market and foreign buyers is to avoid capital controls imposed on Greek banks.
Unfortunately that means that the money spent on luxury Greek properties by foreigners never enters the Greek credit system and only some of it enters the Greek economy, but is impossible to track back to its original origin.
After the imposition of the capital controls [at end-June 2015], the cases of sellers requesting that money be deposited abroad have multiplied. Of course such transactions are entirely legitimate and taxed in Greece, but the revenues remain in other countries.
Transactions registered at Greece’s deed/title offices show a decrease, on average, of 8.6 percent a year from 2004 to 2014, a period that witnessed the real estate bubble burst in the country.
According to data released by the national statistical bureau, EL.STAT, the decrease reached just over 20 percent in the 2013-14 period.
Based on figures supplied by 380 such deed offices around the country – which correspond to 96 percent of the total – 384,546 actions dealing with property were recorded, resulting in 57 million euros in proceeds – 47.2 percent of which were diverted to state coffers and the remaining 52.8 percent collected by the deed offices themselves.
The average sum collected from a single property transaction – which ranges from an outright sale to a transfer, imposing a lien to even adding a co-owner on the deed – reached 149 euros.
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Statista, the online statistics portal for market data, reports that a home buyer in Greececan buy the fifth largest home for 200,000 euros in the eurozone.
Specifically, the amount can buy a newly-constructed 120 sq. meter flat that covers the needs of an average family.
The home bubble has burst, meaning that a new flat in the Attica region where Athens is located can be purchased for 1,650 euros per sq. meter as opposed to 2,500 eurosper sq. meter prior to the economic crisis. Back in those days it was hard to find an apartment of more than 80 sq. meters for 200,000 euros.
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