Study calls for strategy and coordination in real estate

An independent study on the Greek real estate sector calls for the drawing of a long-term strategy and the establishment of an umbrella authority to coordinate the national policy in this domain. The sector study, published recently by the Foundation for Economic and Industrial Research (IOBE), focused on the relationship between the domestic property market and Greek economy, as well as on proposals for the former’s development. «The economy and the real estate market affect and influence one another to such an extent, frequency and variety that the strategic significance of the sector for the economy’s growth becomes obvious and the upgrading of the property market in all expressions of policy is required,» the IOBE report noted. The domestic real estate market has in recent years made significant strides, upgrading its housing and commercial stock to such an point that it now attracts institutional investors’ interest for large-scale investments. The economic conjunction may be characterized as particularly positive, with remarkably high growth rates, while Greece’s tourism profile has received a significant boost with the successful hosting of the Olympic Games last summer. Nevertheless Greece has in the last few years remained outside the focus of property investment capital. The main reason for that, IOBE said, was the lack of a coherent development policy in the sector, which has produced serious problems that have limited its growth potential. «The absence of a specific regulatory framework weakens and upsets the investment planning process, eventually discouraging investments in real estate,» the report stressed, citing as a typical example the very slow pace of progress in the realization of the Land Register. This project was meant to last 20 years, but in the first decade, from 1995 to 2004, no more than 6.5 percent of the land and 15 percent of rights had been covered. This means that Greece remains far from its current needs and does little to help it realize its development targets, the report concluded. New authority proposed To turn things around, IOBE called for a greater effort to combat problems and weaknesses of the public administration (bureaucracy, land register, national zoning plan) and recommended the creation of an intersectoral authority that would serve as the main expression of a national real estate policy. It would aim at the drafting of a long-term real estate strategy combining institutional, economic, tax, technical, research and social ideas and data, so that it can then recognize, record, analyze and quantify the property market. At the same time, this proposed authority could strategically support the work of the Hellenic Public Real Estate Corporation (KED) and the other authorities aimed at the use and management of land and public-interest buildings, including local authorities. It would also direct and support Greek companies’ investment initiatives in the Balkans.