Every one knows that it’s been a hard decade for Greece and the Greek economy. The soap opera-like drama that we watched on media globally, and the real life struggles locally, left everyone with the impression that investment in Greece is a bit of a crazy act.
The recession lasted way too long and the Greek economy hit the bottom of what seemed to be a bottomless barrel. But reaching the bottom is not a bad thing because once you do there is only one way to go; up.
And so now things have started going upwards – a fact proven in numbers.
The recovery of the Greek economy
According to the European Commissioni the Greek economy grew by 1.5% in 2017, another 2% in 2018 and it is projected to continue in a steady growth in 2019. Apart from the encouraging numbers, a low starting base for the economy, some reforms that have had a positive impact and greater political stability are reasons for a more optimistic view.
Coming to 2019 the fear of a Grexit has passed, the sentiment has turned and already some investors are grabbing the opportunity. An experienced pan-European player that is now operating in the country said: “Investing in Greece doesn’t feel so crazy.”ii
What to invest in?
The hospitality sector
Over 30 million international tourists visited the country in 2018 and the number is expected to grow further in 2019, which the Greek Tourism Ministry projects to be a “record year in tourism”. According to WTTC, tourism contributed to 18.6% of Greek GDP in 2016, a figure that is expected to reach 22.4% by 2026.iii
Greece offers the best value for money as a summer destination and is considered a safe place for travelers. Furthermore, the sector is not very much linked to the local economy, which is also considered a big advantage for investments. These are the main reasons why the country now competes equally to other places like the Maldives and Thailand as a summer destination and it offers a great lot of investment opportunities.
Given the above, it’s not strange that most of the investors in Greece have an interest in hospitality. Even major international investors like Marriot and Wyndham hotels expand their presence in Greece nowadays, indicating the potential for profitability.
But this also indicates the difficulties of a very fierce competition that emerges rapidly within the sector. Once you’re there, you must be ready to join the queue. Partnering with the right people will give you a significant advantage and will guide you to a safe investment.
According to the Greek Statistical Service (Elstat), the number of real estate transactions in Greece increased for the first time in 2015, growing by 25% compared to 2014. Since then there has been a moderate but steady improvement.
As a result, the so far continuous decline of property prices is now slowing and there has even been an increase, when numbers were adjusted for inflation, in the last quarter of 2017.
Consequently, construction and rental prices are rising again, fueled by the growing tourism, political stability, the all year amazing climate that attracts buyers from colder countries and the “Golden Visa” program that the Greek government launched to support the estate market.
After several years of recession and inactivity in the Greek real estate market, things are turning around and the recovery seems to be happening at a good pace.
But despite the property prices going up in Greece overall, they still remain very low – the lowest among most other countries in the EU – and in some selected areas of the country, where tax reliefs and other benefits apply, one can find some real gems to invest on.
Consequently, many investors are acting now, with the main property buyers being from China, Turkey, Russia, the US and the Arab countries but also from European countries like Germany, Italy and France.
These investors vary from big corporate investors to even medium-income individuals that are looking to buy residences for private or commercial use and ready businesses in the hospitality sector.
So are you telling me it’s all roses?
Naturally, it never is. As with any kind of investment, there are pros and cons to be considered before one proceeds with an investment in real estate or tourism in Greece.
A big one is of course the taxes that have been imposed to property owners in the past few years, including transfer taxes during the purchase, property tax (E.N.F.I.A) and rental income taxes.
Another one is the problem of overtourism, which results to strained infrastructure and overcrowding in major attractions and popular destinations within the country.
What a smart investor must always do is examine all the factors prior to investing and partner with the right people that will help her find the right opportunities in the right places and will guide her to a safe venture.
Invest in Greece in 2019
Investing in Greece, after a long recession, doesn’t feel so crazy anymore and many first movers are already making their moves.
Two of the best sectors to invest on are real estate and hospitality with great options to combine the two, creating products and services that suit the needs and demands of the new world travellers.
As in any investment, there of course cons to consider. Taxes and overtourism are some of them. But since real estate and tourism in Greece are making a good fresh start, there are still so many opportunities in beautiful, unspoiled Greek places, that all you need to do is find them!
Interested in makig an investment in Greece?
Feel free to contact us!