ECONOMY

More Northern Europeans are in search of the good life

Some 5 million Northern Europeans are expected to scout for holiday houses or even main residences in Southern Europe in the next five years. The retirees among them may well retire in their new homes while the rest will at least visit regularly. Greece has already witnessed this shift as many foreigners have moved here in the past decade. Some of the new expatriates are older, nearing or at retirement age, but they have revived many areas of the Greek countryside. Greek officials expect a future wave of well-to-do foreigners buying homes here in the future that may provide a boost to the Greek economy, as the newcomers will increase demand for homes as well as all kinds of goods and services. Moreover, the newcomers could bring in huge capital and spend a considerable portion of their income here. Generally, this market remains unchartered so far: Greece’s features such as its geographical location, climate, political stability, eurozone membership and new infrastructures will certainly attract the interest of investment capital for the development of housing complexes. The newcomers, especially if they are well-to-do retirees, are expected to buy homes and therefore invest in Greece. Since Greece entered the EU, it is now no longer such a hassle for foreign citizens from one EU member state to buy property in another. Nowadays, many countries are jostling for favor as they try to attract as many buyers as possible for their real estate market. But the experience to date shows that in many cases the main objective has been on creating the most structures possible, while cutting corners on the quality of those buildings. Consider, for instance, the massive but shoddy structures that sprang up in some areas of Spain to this effect. In the long run such an approach proves fruitless. The value of the low-quality building wanes and the dream of «the good life» instead becomes a nightmare for homebuyers. Another useful experience has been the market of Kusadasi in Turkey. International news agencies report that the property market on the Turkish coast enjoyed a great blossoming in 2003. That year in Kusadasi alone some 3,500 houses were sold to foreigners. This interest led to explosive development of the area, in most cases through disorderly structure or cheap constructions, expected to be sold easily to Northern Europeans desperate for sea and sun. Yet today the Kusadasi housing market has crumbled. Local estate agents say that the number of holiday houses available for sale exceeds 50,000, but buying interest is next to nothing. This is closely linked not just to the factors mentioned above, but also to the fact that local builders upped prices and expected a rise in demand. However, as the business world often shows, if you don’t follow the rules don’t expect to realize your expectations.