ECONOMY

Eastern Europeans eye Greek realty

Countries of Eastern Europe, especially neighboring ones, have been providing a new source of demand for Greek real estate in recent years, with prospects for further growth. Residents of Bulgaria and the Former Yugoslav Republic of Macedonia (FYROM), in particular, are making their presence felt in northern Greece. «Interest from residents of Balkan countries in Greek property has been evident in recent years. But in the last year this interest has been expressed in practice, as Bulgarians, in particular, have been buying houses in tourist resorts and urban areas of northern Greece. Of course, they are by no means setting the pace of the market but long-term trends show potential for developing into a permanent source of investment,» a realty broker said recently. «Prospects are linked to three factors. The first relates to ease of access to the Greek market, the second to growing investment in the energy sector and the third to the potential for competitive prices, which can make the Greek housing market (both residential and holiday homes) affordable to middle-income earners of these countries – where the bulk of demand originates. If prices rise steeply, then that demand is certain to be channeled elsewhere, for example to Turkey, or to the domestic markets of these countries. «After overcoming the pains of adjustment, Eastern European countries have moved toward the consumer models of Western Europe. The huge amounts of capital accumulated in the last 15 years have been seeking outlets for investment, and a prime example is the role of Russian capital in the Cyprus realty market, and, in more recent years, the wave of acquisitions in London,» noted another member of the realty arm of one banking group which has a strong presence in all Balkan countries. «There is a lot at stake for the Greek market and no one can ignore it. If we believe that the Greek holiday home market can grow by tapping the potential demand from Central Europeans near retirement age, we must not turn our backs on neighboring markets which are showing economic dynamism,» he added. Reflecting the growing demand, many realty firms active in northern Greek resorts display billboards and notices in Greek, Russian and Bulgarian. «The number of transactions taking place may not be that large but it is almost double what it was three years ago. The interest is not centered only on holiday homes, in recent years it has spread to small apartments in Thessaloniki and other urban centers in northern Greece,» says another broker. Banking officials say the greatest challenge for the Greek market is the creation of networks that will help Eastern Europeans to become acquainted with the Greek property market. «The presence of Greek banks and construction companies in the Balkans makes it easier to meet this challenge. The realty arms of many Greek banks are already active there. Prospective foreign buyers have the possibility of being financed either by the local subsidiary in their country or from the parent bank in Greece,» says one official, while noting that these banks have so far concentrated on promoting Balkan properties in Greece.