Local construction firms are considering an investment switch to luxury homes to respond to the growing demand by non-European Union citizens for this category of properties that come with a residence permit.
While a number of EU countries have similar investor visa schemes, whereby non-EU citizens who buy properties in Europe (in Greece’s case worth at least 250,000 euros) get a visa, the country’s share from this very promising market currently stands at less than 3 percent, according to a recent survey by the association of Greek estate agents and chartered surveyors (EPPA). Greece joined this club a year-and-a-half ago by introducing a law to that effect, but the results to date have been disappointing.
The EPPA survey tracked residential property transactions conducted over the last few weeks across the country. Non-Greek property buyers accounted for 28 percent of all transactions, with half of them (14 percent) involving non-EU citizens, although only 22 percent went for luxury houses worth at least 250,000 euros.
There are plenty of candidate buyers from countries such as China and Russia, but the main problem is the shortage of the appropriate product, even though it is estimated that the number of unsold houses in Greece exceeds 250,000, some 50,000 of which are holiday homes.
According to EPPA’s vice president Theologos Bosdas, “large-scale investments are required, in the order of 40-50 apartments or maisonettes, that can be promoted in an organized fashion to those buyers.” He adds that demand has been expressed for housing complexes of a significant size, comprising 40-50 units, aimed at creating communities of foreign owners. There are no such developments currently available in Greece, hence the slow purchase rate.
Now a series of property development companies and some major construction groups are eager to change that and are seeking plots for the development of major housing complexes. Listed construction group Ellaktor is examining the option of getting actively involved in this market, although, as group officials point out, no decision has been made for now as additional improvements to town-planning legislation are required for such large-scale investments.
An investment move could be in the works at Markopoulo in eastern Attica, as a group of architects and civil engineers have approached a Chinese construction group to discuss plans for a joint development project in an area of 100,000 square meters that is expected to be brought in to the town-planning zone. Interest has come from the Chinese side, too, and the issue is likely to unfold in the coming months.
Chinese groups are mostly interested in the direct concession of plots around the country so they can move ahead with large-scale housing developments. Local property experts say that the overheating of the Chinese housing market has already led a number of companies to seek out investment opportunities abroad, especially in Europe. As a result one of the countries being examined as a possible destination is Greece, thanks also to the increasing tourism flow from the world’s most populous country.
With this in mind, the visits by the Chinese premier and president scheduled for later this month represent a great opportunity for Greece to attract more potential investors to the local real estate market. After all, China State Construction Engineering Corporation, the country’s biggest construction group, is about to implement of a series of investments around the world, and is said to be examining Greece, too, as recent talks have shown.