The Real Estate Market all over the world differs and it’s always good to know how other countries fare in comparison to the Philippines. A good investor has to know where and when to invest and ride the wave on the upside. Greece is a tourism related economy. Philippine tourism is growing however we are primarily a service oriented country. If we could get our act together and improve what the country needs ( infrastructure, transparency, good governance, etc.. ) what a great future the Philippine has in store.
Here’s an article from then debt ridden Greece and take note of the different variables factored into the outlook of their market ( interest rates, rental yields, economic growth, etc ) . This article is taken from global property guide. As you may well know, Real Estate is my passion and I will be travelling to Greece soon, i look forward to analyzing and confirming the information in this article. For now, what i clearly see is a bouyant Philippine property market !
House prices beginning to turn in Greece!
- In Athens, the average price of apartments fell by 6.65% (-4.90% in real terms) during the year to Q4 2014, according to the Ban k of Greece. Compared to the previous quarter, house prices in Athens dropped by 1.46% (-0.78% in real terms) in Q4 2014.
- In Thessaloniki, the country’s second largest city, house prices fell by 6.89% (-5.15% in real terms) y-o-y to Q4 2014. From the previous quarter, house prices were almost the same, slightly declining by only 0.33%. When adjusted for inflation, house prices actually rose by 0.35% from the previous quarter.
- In other cities (excluding Athens and Thessaloniki), there was a 5.86% drop in house prices (-4.10% in real terms) during the year to Q4 2014. During the latest quarter house prices fell by 1.94% (-1.26% in real terms) in Q4 2014.
- In other urban areas (excluding Athens), residential property prices declined by 1.80% (-0.38% in real terms) y-o-y in Q2 2014. Quarter-on-quarter house prices slightly rose by 0.39%, although they actually fell by 0.87% when adjusted for inflation in Q2 2014.
Alpha Bank A.E.’s Theodoros Kalantonis is optimistic that home lending will revive soon, saying this year will be a turning point for the Greek mortgage market as buyers realize that prices won’t decline any further.
Despite green shoots, activity is amazingly depressed: Residential property appraisals-transactions were 33.20% down on the previous year in 2014; dwelling permits fell 19.3% from January to November 2014 compared to the same period in 2013; total new floor space, measured in square metres, was down by 13.9% y-o-y as of November 2014 – large falls in an already cataclysmically depressed housing market (see below).
To revive the housing market, the Greek government recently offered residence to non-EU investors purchasing or renting property worth over €250,000. The residence plan, which is similar to measures adopted by Hungary, Spain and Portugal, is valid for five years and open to renewal.
The Greek Finance Ministry also announced last December that capital gains tax on property, originally scheduled for introduction in summer of 2014, will be pushed back to December 31, 2016.
Analysis of Greece Residential Property Market
In the suburbs of Athens, i.e., Ekali, Kifisia, Psychiko, Glyfada, the average price per sq. m. of apartments ranges from around EUR 1,600 to EUR 2,200, while houses cost around EUR 3,100 per sq. m.
Apartments in Crete cost around EUR 1,500 per sq. m. while villas cost around EUR 3,200 per sq. m.
Monthly rents per sq. m. in Athens range from around EUR 6 to EUR 9 per sq. m.
In Crete, monthly rents per sq. m. of apartments range from around EUR 4 to EUR 7.
Gross rental yields from properties in Greece, i.e. the gross return on investment in a property if fully rented out, remain very poor, ranging from 2.70% to 4.60%.
When buying property, take into account the fact that round trip transaction costs are quite high in Greece.
Inheritance: Inheritance tax is levied at different rates depending on the relationship between the deceased and the beneficiaries.
Residents: Residents pay taxes on their worldwide income at progressive rates.
The central bank warns, however that the political uncertainty in the country, in relation to the recent elections, might cause a negative spillover. According to Bank of Greece Governor Yannis Stournaras, political uncertainty was already affecting local markets. “There is a risk that the growth that has only just started to resume may be halted, but there is also a large risk of irreversible damage being done to the Greek economy,” said Stournaras.
In 2014, Greece was able to sustain a primary budget surplus of around €1.9 billion, although it fell short of the government’s €4.9 billion target. This was an improvement from the €691 million budget surplus recorded in 2013, the first primary budget surplus in a decade, and the €3.46 billion deficit in 2012. In 2015, Greece is aiming to attain a primary budget surplus of around 2.9% of GDP, slightly down from the bailout deal’s 3% target.
The country’s budget deficit is expected to decline to just 0.2% of GDP in 2015, down from 1.3% of GDP in 2014. The country’s overall budget deficit stood at 2.2% of GDP in 2013, far lower than the budget deficits of 6% of GDP in 2012, 9.5% in 2011, 10.5% in 2010 and 15.8% in 2009.
Greece’s national debt reached 176.3% of GDP in 2014, slightly higher from the 174.9% of GDP in 2013 and 156.9% of GDP in 2012. National debt is expected to fall to around 170.2% of GDP in 2015.
Consumer prices in Greece are still declining, with prices falling 2.2% during the year to February 2015, less than the 2.8% annual deflation in January 2015 and 2.6% in December 2014, according to the Hellenic Statistical Authority (El. Stat.).
Unemployment was 26% in December 2014, down from 27.3% in December 2013, according to El. Stat.