Real estate helps boost Greek wealth
With Greeks continuing to be conservative in their investment choices, opting mostly for the real estate market, the country’s residents saw their wealth grow in 2004 by a healthy 7 percent rate, thanks to solid price rises in the property market, according to data released yesterday. The Bank of Greece, the country’s central bank, said in a report yesterday that private investors saw their wealth rise by just over 7 percent year-on-year in 2004 from 6.7 percent in 2003. Greeks’ combined wealth grew to 690 million euros last year and this largely came about because 85 percent of people’s money was invested in property, with another 11.5 percent being parked in bank deposits. The heavy emphasis on property has had a positive knock-on effect on the wealth of private investors, as it also outweighs any adverse impact from other investment forms. Private investors are still adjusting to the country’s entry into the euro in 2001 and many residents are taking advantage of the present low interest rates. The report yesterday helped to allay fears of over-lending in the economy, saying that households have so far been borrowing well within their economic means. It is this lending that has helped feed growth rates in property prices but there was a slowdown last year. In 2004 property prices rose 5.7 percent on an annual basis, sharply lower from 13 percent in 2003. The Athens bourse continues to rank low in investor priority after its recent three-year slide. Despite a 20 percent jump in the Athens bourse’s benchmark general index in 2004, only 3.49 percent of wealth was invested in equities. Trends, however, seem to be shifting as far as state bonds are concerned. In the last two years, there have been more investors turning to the tax-free returns offered by the state bonds auctioned on a regular basis to the investing public. The report also pointed out that the habits of local private investors differ considerably from their European Union peers. In Great Britain, residents place the majority of their money in pension programs, while in Germany two-thirds of wealth is located in pension fund programs and bank deposits.
