ECONOMY

Russian interest in Greek resorts is on the rise

Russian private investors have appeared increasingly interested in the real estate markets of the Mediterranean, particularly those of Greece and Cyprus, in recent months. This is obvious in many popular tourism destinations in this country, with estate agents suggesting that this interest is primarily for investment purposes. Having realized the great potential of Greece in terms of the holiday housing market, Russian investors are making rapid moves to secure plots that are seen as precious. Estate agents in various tourism areas of Greece say that these interested buyers are particularly wealthy and willing to invest significant funds. What they are seeking, though, tends to be unavailable in most cases: seaside areas of considerable size that can be developed for tourism. It is not only Russians who seek such plots, as domestic and other foreign real estate groups are also showing similar preferences. Their common denominator is the intention to develop tourism infrastructure ranging from hotel units and golf courses to holiday homes. The areas that made up the bulk of demand from Russian investors are Hania, Corfu, selected islands of the Cyclades and Porto Heli in Argolida, in the eastern Peloponnese, a developing area that is near Athens. Dolphin Capital Investors, of Miltos Kambouridis and Pierre Haralambidis, has planned the development of two projects in Porto Heli, which include luxury holiday houses, a golf course, a hotel unit and a series of accompanying services. There is also interest in areas of northern Greece such as Halkidiki and the islands in the Northern Aegean such as Thasos. Porto Carras Interest by Russian investors in Halkidiki’s Porto Carras tourism complex was recently linked with the prospect of the creation of housing zones with luxury holiday homes. Although owner Technical Olympic SA does not plan to start work in the area for almost a year, the company has received dozens of requests from Russian citizens interested in acquiring a house in the Halkidiki complex. Within this context, the group has begun preparing for the process so that when the government’s special zoning plan for tourism is approved, it will be able to submit its applications for the essential building permits at Porto Carras immediately. Crucially, it is not only investors but simple individuals from Russia who are interested in acquiring a house in Greece. This comes as no surprise to market professionals, as it is well-known that the Russian economy has for some time now overcome the teething problems of its exit from communism and its transition to a market economy. The sole obstacle in Greece’s case is the visa problems which Russian citizens have with staying in this country for long. The two-year duration of visas makes potential homebuyers more reserved. However, this issue is on its way to getting resolved and already the issuing of visas has become much easier. In Cyprus Russians make up at least 50 percent of holiday home buyers on the Mediterranean island. Cypriot authorities say that the licensing process in the island’s real estate market is extremely simple. Once a foreigner has acquired a house, he is granted a six-month renewal to his residence permit. Therefore, the sole limitation is finding the appropriate property. If a foreigner buys land, he has to build on it within three to five years. There is already the development of local economies in areas that had not been utilized before. A case in point is Paphos, on the southwest of the island, where plans include a new airport, a highway to link the town with the seafront and a new marina with a capacity up to 1,000 vessels. That does not mean that prices are low. In Paphos detached houses start at -300,000. The cost of an apartment (of 70-80 square meters) is significantly lower, though, ranging between -100,000 and -150,000. Yet prices have nearly doubled in the last three years. In total, the rise in Cyprus prices ranges between 15 and 20 percent every year. Foreigners choose the island not only for investment purposes but also for its favorable system for land purchases, its relatively low cost of living – compared with other countries – the climate and the low crime rate, according to estate agents active in Cyprus.