Economic crisis not affecting interest in Greek property, it is suggested

Estate agents are seeing a steady stream of enquiries about property in Greece, especially at the high end, but prospective holiday home buyers might want to adopt a wait and see approach due to the current financial crisis in the country.

One agent seeing demand is Chestertons International which has found that so far the property market has proved to be stable and in particular, the island of Mykonos continues to grow in popularity.

‘If clients are not looking primarily for investment but want to own a second lifestyle property, then Greece continues to offer everything that it has always had to offer. If, however, clients are looking for future investment they will need to take into account both the economic environment and the ultimate currency that Greece might use,’ said Neville Page director of International at Chestertons.

He explained that it is currently difficult to predict the final outcome of the negotiations between Greece and its European partners, but opinion seems to be becoming polarised between either Greek remaining in the Eurozone or re-establishing its own currency.

‘If Greece remains in the euro we would be very optimistic about property markets in the short term, particularly with the currency fluctuations in the euro we have seen in 2015, meaning new UK based investors can get more for their pounds,’ Page explained.

‘In the event that Greece was to adopt a different currency, there would be the strong risk of devaluation in the short term. However, this could provide a buying opportunity for the brave investor who recognises the enduring long term appeal of Greece,’ he added.

Louise Reynolds, director of overseas property agency Property Venture, believes that if Greece introduces a new local currency, in all likelihood it would depreciate immediately. ‘The International Monetary Fund (IMF), has in the past predicted Greece would need a devaluation of at least 20% against the Eurozone average, just to balance its current account. Such devaluation would increase Greek competitiveness, but would have huge legal ramifications with regard to the existing debt owed to Europe and the IMF,’ she said.

‘The danger lies with the capital flows, which are the biggest unknown. The world’s central banks will do their utmost, as they did during 2008, to prevent financial meltdown or contain the damage through a range of mechanisms such as bank capitalisation, foreign currency swaps, and potentially capital controls,’ she added.

She thinks property buyers in Greece and home owners may want to make sure they have access to money in an international bank, given the capital controls in place. ‘If Greece leaves the Eurozone, it is likely that savings in the state-controlled banks would be converted into local currency which are likely to be worthless. It is also likely that a mortgage could be converted into local currency so mortgage holders could benefit if there is a devaluation-effect,’ she added.

Those who already own property have seen lettings demand and revenue doubled, according to Beauchamp Estates in Mykonos, especially those with high end holiday lets. There has been demand for villas at €35,000 per week or higher and exchange rates mean that British holiday makers, for example, are effectively getting a 10% discount compared to last year when paying in pounds sterling, and it is 18% cheaper for visitors paying in US dollars.

In Mykonos the boutique shops, yachts, fine dining restaurants and luxury accommodation sectors have reported an ever increasing numbers of tourists from across the Middle East, Europe and North America.

‘In Mykonos it is business as usual. This week, we have continued to see buyer enquiries from across the world, while many of our top lettings properties are already fully booked for the entire summer,’ said Roi Deldimou of Beauchamp Estates.

He added that in general, although there are banking restrictions in place there is currently no change for Mykonos’ visitors whose lifestyles remain unaffected by the economic and political situation.

London based luxury housing developer Euroterra Capital is planning to open an office in Mykonos in September. Managing partner Pantazis Therianos, said there is still strong demand from tourists for rental homes on the island and this means that buyers have a potentially good rental market.


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