ECONOMY

Gov’t sees rosy future in real estate market

Government officials yesterday painted a rosy future picture of Greece’s real estate market and called on foreign investors to take up positions. Addressing more than 800 participants from 70 countries at the 56th conference of the International Real Estate Federation (FIABCI) in Athens, Deputy Development Minister Giorgos Salagoudis said the market will be bolstered by tax measures, a national zoning plan, now in the draft stage, and the utilization of Olympic installations. The introduction of value-added tax on building licenses as of January 1, 2006, and the simultaneous abolition of the property transfer tax will be the first steps toward simplifying real estate taxes, he said. Moreover, the new zoning plan «seeks to restore a positive climate for attracting foreign investment, which has been undermined by continuous reversals in administrative decisions and the lack of a stable legal framework,» Salagoudis added. Besides creating a framework, the new system will also upgrade environmental protection and the quality of housing, he said. Deputy Finance Minister Petros Doukas said that Greece, as the most developed country in Southeastern Europe, with modern infrastructure, is an ideal place for investment by enterprises interested in expanding into the broader region, which has prospects for high growth and great opportunities. He noted that the government is gradually reducing corporate taxation from 35 percent to 25 percent and is accelerating procedures for the approval of large investment schemes in real estate. Development Ministry’s general secretary, Michalis Voloudakis, said a reform of the legal framework for the real estate sector in the next few months will greatly simplify procedures for land investment. The president of Greece’s Real Estate Brokers’ Federation, Pantelis Harokopos, urged the government to reduce the property transfer tax from 13 percent to about 4 percent, which is nearer the prevalent level in most of Europe. He cautioned that the urban commercial property segment of the market is in recession, and is not likely to recover anytime soon, given the large number of properties for which there is no demand. He noted that rents have declined by up to 40 percent in recent years. In contrast, demand for housing is good, particularly for apartments of up to 100 square meters and near metro stations in Athens. Demand for larger apartments, of more than 150 square meters or at prices higher than 300,000 euros, is stagnant.