It does not take a rocket scientist to realise that the Greek economy will take many years to recover and the country will for some time be effectively controlled by the European Union. This is the cost of the massive ongoing financial bailout after the country collapsed and stood on the edge of oblivion. Unemployment is skyhigh, the economy is struggling, further bailout funding may be required and the political arena is complicated to say the least. So, what is happening with the Greek property market?
Bottom fishers show interest
As we mentioned in some of our earlier articles about the Greek property market, some international investors have shown interest in the market but only at rock bottom prices. Very often the prices you see advertised bear little resemblance to the offers the sellers will receive. While eventually the “bottom fishers” will mop up so much stock that property prices do recover, many expect this to be sometime offers yet. In theory there must be long-term value in Greek property but the economy and the political arena could still yet bring about the fall of the country.
Public properties sold off below market value
There have been rumours and counter rumours regarding the sale of public properties by the Greek authorities at well below market price. Such is the desperation to raise funds to keep the public sector going that very often the Greek government is literally forced to take whatever deals are on the table. This has seen an array of public property sold off at a fraction of the current value and this is likely to continue for some time to come. In theory, if you put yourself in the place of a potential buyer, why would you rush to pay the market price when you know the government is desperate for cash?
Failing trust in Greek authorities
While the authorities are obviously desperate to raise much-needed funds we are starting to see more frequent instances of favourable conditional land/development sales by the government which look very different after the deal has been completed. We have examples of developments sold with promised planning permission only for this to be delayed or blocked further down the line. As you might guess, this kind of activity by the Greek authorities does not exactly instil confidence from the investment community.
One unwanted record relates to a development in Cavo Sidero which 22 years after purchase is still waiting for planning permission to develop the 26 km² area. Rather amusingly, this development was recently added to the “fast-track process” and is expected to be completed by 2019. We guess that the developers/investors are not holding their breath!
Too much red tape
A number of reports of late have also highlighted the excessive red tape required when selling a property. It is believed that 10 individual pieces of paper are required before any one property sale can be completed. You would have thought with the economy struggling and the property market at rock bottom the authorities might have simplified the process to attract more investors?
At this moment in time it is difficult to see any meaningful short to medium-term recovery in the Greek economy or the Greek property market. While the economic situation is obviously holding back the market the government of the day is not exactly doing much to help?