ECONOMY

Legal shortcomings plague Greek holiday home market

Greece’s holiday home sector is undoubtedly a very promising segment of its realty market and, within that context, great expectations have been build up by real estate experts. However, such pompous statements as «Greece is the most beautiful place on earth» and «we could be the Florida of Europe,» are far from securing concrete results. The latest proof of the Greek holiday house market’s insufficiency comes from the annual survey by International Living, an international magazine, examining the attractiveness of certain countries in drawing investors and holiday home buyers’ interest. Sadly, Greece is featured as low as 23rd place in a total of 29 countries, as a result of inadequacies in basic selection criteria. First and foremost among such shortcomings are the difficulties that foreigners face when purchasing a home, whether or not they are willing to obtain a second nationality or citizenship in the new place of residence. Other factors deterring foreigners from seeing Greece favorably include the cost of living, cultural life, health services, infrastructure, safety-stability and, naturally, the climate. «The entire set of criteria used by International Living comprises the comprehensive picture of a modern and organized country, but with an emphasis on the good reception of foreigners, whether visitors or settlers,» says Frangiskos Kallivrousis, a real estate consultant. «This dynamic group of upper middle-aged people, usually retirees, features the characteristics of a tourist, an investor and possibly a permanent resident. «It would be hard to adequately respond to the recorded requirements and considerations of this significant group of people unless we proceed to directly improving services and modernizing the legislative framework,» he added. The above obviously point to the low position Greece was ranked in the survey, far below some directly competitive European destinations, such as Italy (3rd), Malta (6th), Spain (7th), France (10th), Portugal (17th) or Slovenia (19th). The reality is that the Greek holiday house market’s most serious problem for foreigners is of an institutional nature. In terms of product, supply is good and growing at a fast pace. Seeing the opportunities opening up, almost all of the country’s major construction firms and developers have turned to the promising holiday house market. J&P Avax is highly active in this specific area, developing and marketing holiday house complexes on Crete. The firm has entered into a partnership with Dolphin Capital for the development of a 400-hectare tract of land. On the island of Naxos, Copelouzos Real Estate is currently in the final stages of preparations for the construction of two holiday home complexes, at Pyrgaki and Kastraki, offering a total of 41 houses. Construction is expected to get under way next September and finish in 18 months. GEK Group’s involvement in this segment of the real estate market is rather low, despite other strong activity in the property market. However, the firm’s record includes the development of 38 holiday homes on Paros island, while it is preparing to commence with the construction of another complex on the same island. Newcomers in this market include Lamda Development, which now owns an 11.6-hectare expanse in Perdika, on the island of Aegina. The value of the investment is expected to total some 50 million euros. Developer Babis Vovos has also entered the holiday house market and the firm is currently working on a 6.2-hectare land plot in Sounion, Attica, constructing a luxury hotel complex. The snags «Imagine that you arrive in a foreign country with the aim of buying a nice holiday home. On the way from the airport to your hotel, the taxi driver rips you off. Then, you notice that on the title of the property you are about buy, the dimensions appear to be smaller than what you have been told, and the same applies for the value. «While trying to find explanations to understand why this is so, the locals appease you that ‘this is the way things are done here.’ Well, after all that, would you feel secure going ahead and buying a property in that country and paying some thousands of euros?» wonders Babis Haralambopoulos,president of the Hellenic Institute of Valuation. He believes that the problems facing the holiday house market are rooted in the very complex taxation and town-planning systems, in addition to the lack of any official land register and limited transparency. And this, according to Haralambopoulos, largely explains why Greece ranks very low in attracting foreigners willing to invest in the holiday house market, a market that is flourishing in many other competitor countries.