Is it profitable to make property investments in Greece now? Greece experienced tumultuous years when their economy went into recession. However, the latest data show robust growth that seems to improve economic conditions, making the country a profitable investment region.
With a titular gross domestic product (GDP) of $218.032 billion per annum, Greece has become the 51st in the world in terms of economy. In the 28-member European Union, Greece was ranked the seventeenth-largest economy. The country is the 55th in the world as the largest economy about purchasing power parity at $317.455 billion per annum. It is also estimated that Greece’s gross domestic product per capita was $20,408 at nominal value and $29,123 at purchasing power parity as per IMF in 2018.
Greece was the top-three in Serbia and Romania, an important trading partner and largest foreign investor in North Macedonia, the largest foreign investor in Albania in 2013, and the third in Bulgaria. This country is a notable agricultural grower within the EU. Even Greek’s own telecommunications company, OTE, is considered a tough investor in other Balkan countries.
The Economic Status of Greece
Greece’s economy is the 106th freest in the 2019 Index with its Economic Freedom score of 57.7. Among the 44 countries in the European region, Greece ranks 43rd overall. This ranking signifies below regional and world averages, still. Significant improvements on property rights, government spending, fiscal health, and financial freedom contributed to the economic freedom index. But, they were offset by an extreme decrease in government integrity, judicial effectiveness, business freedom, labour freedom, monetary freedom, tax burden, and trade freedom.
According to Transparency International, Greece ranks as the 67th least corrupt nation out of 180 countries. This ranking shows the great need to address corruption issues if they want more investors to capitalise on the country.
Liveability in Greece
Athen’s liveability rating has gone down by six percentage points in five years due to Greece’s debt crisis. Unfortunately, it is the only city in Western Europe without a top-tier living environment and has dropped out of the annual liveability index with less than 80 by the Economic Intelligence Unit.
Economic Intelligence Unit suggests that employees transferred to a city with a score of less than 80pc must receive additional financial support from the employer. The EIU considers stability, culture and environment, education and infrastructure, and healthcare as essential factors in measuring a city’s liveability. The country dropped its liveability rating from 77.5pc to 75.3pc and struggled with creditors over debt repayments. With the 140 places ranked, Athens plunged from 69th to 72nd and is the only city in the Eurozone with a liveability rating of less than 80pc.
Property Investments in Greece
The property market of Greece is experiencing a significant turnaround from the slump it has experienced a few years back. As a result, more and more overseas investors are taking their chances with this Mediterranean country. Foreign capital flow in the country increased at an impressive 155.7% rate with its year-on-year data from January 2019, according to the data provided by the Bank of Greece. This robust increases in the number of foreign investors in the country are due to the higher revenues they are expecting to generate from improved tourism. Aside from investing in short-term rentals, more foreign investors are banking on Greece’s economic growth as a good source of stable income.
Additionally, Greece’s offer of a Golden Visa has significantly contributed to the trend of foreign buying. The Golden Visa gives non-EU residents a five-year residency permit in Greece. Most of the overseas buyers are Chinese nationals who want to take advantage of the visa, which allows them to travel and live in EU countries for five years.
Property Market Trends in Greece
Greece’s urban areas are now seeing renewed interest from foreign investors thanks to burgeoning economic conditions. According to the Bank of Greece, property house prices appreciated by 2.51% from the year to Q3 2018, posting all-time high annual increases since 2008. The urban city of Athens posted significant increases, reaching 3.71% during the same period. Thessaloniki also enjoyed appreciation of 1.9%. While these increases may seem modest at best, these figures are small wins for Greece, who had to deal with unfavourable valuations a few years ago.
Much of this real estate growth is a result of the Greek government’s offering of renting power to non-EU investors. The Golden Visa has a validity of five years and allows foreigners to make property investments in Greece. This visa allows these foreigners to take advantage of living in the EU. The current rental yields in Greece are showing healthy returns. Foreign investors who own rental properties in Athens can enjoy gross rental yields of 4.2% for larger units and 5.75% for smaller units. Surprisingly, suburban areas of Athens, such as Glyfada and Voula, also offer impressive yields ranging from 5% to 6%.
CHG Recommendation: Rental Properties are the Best Investment Options in Greece
If you are seriously considering to make property investments in the Greece market, the best option is to get a small rental apartment in Athens or within its nearby suburbs of Glyfada. Foreign investors have so much to gain from these properties. They can get a Golden Visa, they don’t have to shell out much capitalisation to own a property, and they will earn as much as 6% gross rental yields annually. With tourists flocking the country year-round, these apartments will surely be filled out throughout the year. Often, mortgage costs can be effectively covered by the rental earnings.