BUSINESS

Greece still unattractive for property sector investors

NIKOS ROUSSANOGLOU

Investors can find opportunities with high yields, such as apartments in the historic center of Athens. With a moderate renovation they can use the popularity of short-term leasing platforms to fetch significant revenues.

TAGS: Property

Greece remains among the least attractive destinations for foreign property buyers looking to make an investment. A list drafted by the Global Property Guide – an international provider of information for property investors – has placed this country 32nd among 36 states, as its prospects for an investor are seen as quite unattractive.

The Global Property Guide report stresses that the high taxation of rental incomes and the high cost of transactions (transfer tax, various stamps etc) are strong counterincentives for investors.

Greece has one of the highest rental taxes, coming eighth among 42 countries. For the first 12,000 euros of annual revenues from rent the tax comes to 15 percent, up from 11 percent until 2015. For revenues between 12,000 and 35,000 euros per year the rate soars to 35 percent.

The high income tax combined with the huge ownership tax (ENFIA) and the country risk of Greece over the last few years, have forced any investors of the local buy-to-let market to seek higher returns. Consequently, and despite the drop of home prices by some 45 percent since end-2008 in Attica, Global Property Guide concludes that property prices remain high in relation to the incomes an investor can obtain from them.

Of course, there are still a few opportunities with high yields, such as apartments in the historic center of Athens. With a moderate restoration, investors can use the popularity of short-term leasing platforms such as Airbnb and Homeaway to fetch significant revenues from visitors to the Greek capital, as is already the case, according to Global Property Guide. A similar trend is gradually expanding to the rest of Greece, particularly in areas that benefit from the high flow of tourism.

The other point of interest for foreign investors is luxury homes in the countryside, especially in tourism hotspots: Villas on Myconos, Santorini, Crete (Elounda in particular) and other areas can fetch almost twice as high yields as a (relatively expensive) property in the northern suburbs of Athens.

An analysis by Algean Property has argued that the Greek luxury holiday home market on islands such as Myconos and Santorini is particularly competitive compared to other Mediterranean destinations such as Ibiza, Majorca, Nice and Cannes.

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