In the midst of the crisis Greeks are buying extremely expensive properties abroad
19 February 2012 / 20:02:09 GRReporter
“Welcome to … cash Greeks”, ie the Greeks who pay cash.
This expression is used by brokers and real estate agents abroad, thereby confirming the opinion that the Greeks in large numbers are buying real estate property abroad for living or business purposes.
The expression «cash Greeks» was first used ironically last year by the newspaper “The Guardian”, which asked the question where do Greeks find the money from to buy real estate, even in the expensive neighborhoods of London.
Recently, this phenomenon is increasing and there are already people looking for real estate properties worth 100 and 200 thousand euro. Until 2011 what was mainly bought were properties worth 500 thousand euro and up, the majority of which in Britain, but the fear of bankruptcy and the need to secure their savings, is making more and more Greeks turn to the real estate markets abroad.
“Every day we get orders to look for properties abroad, even from pensioners who have taken their due money for retirement in a lump sum and want to invest it outside Greece,” says Theodoros Bosdas, CEO of Engel & Voelkers North, a chain of real estate agencies, which consists of 470 agencies in 36 countries.
When asked who are the people who have money to buy property abroad, experts divide them into the following categories: Wealthy Greeks. Politicians, businessmen, shipping magnates, journalists, entrepreneurs, artists who buy homes and villas. We are talking about property worth 700 thousand euro to 1,5 million euro as well as chalets in Switzerland, exceeding 2 million euro.
There are cases, mainly in London, when the Greeks become shareholders in a company established with the aim of purchasing only one property.
Purchase instead of rent “Investors in the crisis”, i.e. those who are afraid of the bankruptcy of the state. They are only interested in houses worth 80-100 thousand euro. These are mainly parents who are buying instead of renting accommodation for their children studying abroad. Many people, however, buy apartments and rent them out and collect rents.
The economic crisis and uncertainty are the main reasons driving the Greeks to escape. As Nikos Batistatos, chief executive of the “Construction Company» said «today there is no sound investment environment in Greece. The uncertainty of tomorrow, the probability of bankruptcy of the state and the collapse of the financial indexes, create anything but a suitable investment environment.”
After the country entered in the “adventure” called Memorandums, there has been a striking increase in the number of people who are buying real estate abroad. There are no official figures for all countries as many purchases are made in secret or through the establishment of companies. Nevertheless it is considered that since 2009 the number of Greek investors has tripled, while capital invested in real estate reached a minimum of 1 billion euro.
The best “destination” for the capital of the Greeds is of course London, although in recent months the demand for real estate in Germany has increased considerably.
An increased interest in the French-German “axis” Germany: The security of the German economy, high yield reaching up to 8% in housing and opportunities for quick rental, are the main reasons for the booming demand in Germany. As Mr. Bosdas indicates “there is demand from small investors with up to 300 thousand euro primarily for student housing, but also for other homes and shops that are rented immediately.
France – Switzerland: Demand for properties in these two countries, not only for chalets, but also for luxury homes in Zurich, Geneva, Bern, Nice, Marseille, Monaco is increasing.
London: For over 20 years, Greeks have invested in the capital of Britain. It has been estimated that in 2009 alone Greeks have invested over 295 million euro there, and just as much was invested in 2010. Kensington, Chelsea, Mayfair, Knightsbridge, Regent’s Park, are the regions sought by Greek investors, bearing in mind that some of them are among the most expensive in the world.
An apartment of 50 sq.m. in London could cost 1 million pounds, so it is unclear what resources they have. According to some rumors a Greek family bought last year a house worth 5.5 million pounds. In any case, student housing worth up to 500 thousand pounds is among the most popular.
The Economist