A Real Estate Bonanza For Greece?
Large-scale Developments Will Attract Wealthy Foreigners, Boost Economy

by Christos Papoutsy

The largest segment of Europe’s population – known as the “baby boomers” – is fast reaching the age of retirement. This army of “baby boomers” is expected to create a series of economic opportunities in the warmer climates of Europe. This baby boomer generation accounts for about 50 million, mostly in the European Union.

A sizable proportion of these people live in the colder northern European countries, including Germany, Holland, Sweden, Britain, Norway and Belgium. Many of these baby boomers have enjoyed annual holidays in the Mediterranean, have expendable income and can afford to consider a second vacation home in a warmer climate.

Official statistics on real estate sales in the Mediterranean countries are sketchy. International real estate agents in Spain estimate that 30,000-40,000 properties were sold to people from the UK during 2002. The average unit price for these vacation homes amounted to approximately 175,000 euros, resulting in 5-7 billion euros of direct foreign investment to the benefit of Spain. The purchase of these vacation homes generate a significant local demand for a wide range of goods and services, including consumer goods, food and beverages, medical services, and insurance to name a few.

They also contribute to local tax revenues. The Spanish government recognizing the importance of this category of foreign investment has created a special department for this sector, known as “Residential Tourism.” This department encourages new development and promotes the Spanish second home market.

The second home real estate market in the United States as reported by the National Association of Realtors recorded that during 2001, 356,000 second homes were purchased up from 264,000 in 1991. The average price for a second home in the USA is $127,000.

What is the potential for Greece?

During 2002, fewer than 3,000 foreign nationals purchased second home properties in Greece. What is the problem? Is Greece less beautiful than Spain? Is it a less desirable place to live? There are more flights from northern Europe to Spain then Greece and flights are also somewhat less expensive. The airline industry indicates that if the demand for flights to Greece were greater, apart from the summer season, they would offer more flights at lower prices.

During 2002, fewer than 3,000 foreign nationals purchased second home properties in Greece. What is the problem? Is Greece less beautiful than Spain? Is it a less desirable place to live? The problem is that the existing supply of residential property in Greece fails to stimulate demand.

The problem is that the existing supply of residential property in Greece fails to stimulate demand. Existing zoning policies limit residential development outside urban areas and international purchasers are cautious about buying properties that may be out of variance. Zoning laws make it difficult for developers to build small and large scale developments.

Little effort is made to promote Greek residential properties to the international markets, thus a limited awareness of the market in Greece resulting in less demand.

What can Greece do to tap into this huge international real estate potential? A strategic plan needs to be developed and implemented which should include legislation to make land available for development, while protecting the environment. The potential economic benefits to this untapped sector would be substantial. If during the next ten years 200,000 new second homes were developed and sold on the international market at an average of 200,000 euros, this would result in approximately 40 billion euros of direct foreign investment. The demand for local goods and services and the contribution to local taxes could also be worth billions of euros per annum. Other countries such as Croatia, Turkey, Egypt and Belgium are trying to develop their residential markets and attract foreign investors. Greece enjoys a major advantage of being an EU country i.e., possessing a lower risk profile, and residency agreements and capital transfer agreements.

These new markets are very competitive in pricing with some aiming for EU membership in the next few years.

The opportunity for significant investments into the Greek second home sector is great. For those investors that want to purchase or build a vacation home in Greece, without the assistance of a Greek developer, property consultant, or local attorney, the legal issues can be rife with danger. In Greece there is the “psst you want to buy a house?” syndrome in every village as locals attempt to sell the family jewels to rich tourists. Unfortunately, this route can be complicated and expensive.

Land in Greece is often owned by several family members, who may live in different parts of the world – and they all have to agree and sign the purchase contract.

Where a number of owners within a family have to sign an agreement to sell this property, it can sometimes take years, as it recently took the Greek government ten years to get the land deeds for a new airport outside Athens. Buyers are also encouraged to examine the authenticity of the house’s earthquake resilience. Sometimes the certificates are more resilient than the house.

Once you have purchased the land, can you actually build on it? Is it in or out of the village boundary? If outside, it has to be at least 4,000 square meters.

You may have received planning permission, but what about the olive trees on the land? Under Greek law you can have clear title to ownership of land but not own the olive trees upon it. This can make building difficult and don’t forget the all important IKA (HKA).

Purchasing a house or land in a Greek village can be challenging but rewarding if patience and a good local real estate attorney are part of your property consulting team.

Listed below you will find a list of contacts that can assist you in identifying and purchasing your dream vacation property in Greece.


Hellenic Homes
Tel: +44(0)871 900 2739 E-mail:info@hellenichomes.com
Website: www.hellenichomes.com

Crete Property Consultants
Tel: +44(0)207 328 1829
E-mail: oonaghk@btinternet.com
Website: www.creteproperty.co.uk

Euroland Crete
Tel: +30 28250 32557
E-mail: euroland@grecian.net
Website: www.euroland-crete.com

Aube & Associates
Tel: +41 91 960 58 03
Mob: 07732 855 298
E-mail: info@aubeassociates.ch

D&L Property Consultants
Tel: +44(0)207 726 2651
E-mail: info@hellenicrealestate.co.uk
Website: www.hellenicrealestate.co.uk

Savvaidis & Associates
Tel: +30 22 4107 0017 or e-mail
E-mail: info@rre.gr
Website: www.rre.gr

Greek Embassy
Tel: +44 (0)207 229 0881
Website: www.greekembassy.org.uk