Foreign private equity funds with no prior history in Greece are said to be looking for opportunities in the depressed Greek property market either through direct purchases from the owners or through bank foreclosures. Interest in the Greek market began to accelerate immediately after the announcement of the referendum, which sent prices plunging further.
Sources at a leading American investment consultancy firm that specializes in real estate told Kathimerini that most of these investment funds target returns in a five- to seven-year frame and have planned for a three-year period of inactivity of the asset. This is the period they believe will be required for gains to be achieved through reselling the properties.
Most of the interest is coming from the US and China. New legislation in the pipeline regarding how banks handle foreclosures is expected to act as a catalyst for sales.
The Greek market was seen as particularly attractive due to the recent possibility of a new currency, which would have driven prices down further, but also because of the country’s poor macroeconomic environment. China’s growing business interest in Greece via the country’s main port is also a driving factor.
At the same time, the climate of insecurity has caused several international names to freeze their expansions in Greece, sources close to the issue said.
In any case it is clear that the sharp drop in prices, and often the expectation of even greater discounts, are attracting foreign investors with a risk appetite for the Greek property market.
According to the periodical survey Global House Watch, issued by the IMF, Greece is showing the third-largest correction in house prices worldwide since 2007. Prices in Greece have fallen about 40 percent, with a corresponding drop in Latvia of 45 percent and Ukraine 70 percent.