Buying real estate in Greece

Buying real estate in Greece is different from buying real estate under the Anglo-Saxon legal system and way of doing business. Greece is only just opening to the foreign markets and has yet to tune in with the respective requirements and way of doing business.

Unless a potential buyer has intimate knowledge of the market, the different characteristics of the various municipalities, local values, and of the legal procedure to be followed, he/she is strongly advised to secure the services of advisors who have deep knowledge of the market, of the various municipalities, of the legal system and of the state procedures and quirks. The knowledge of Greek and of the Greek mindset is of utmost importance.

Athens has 35 municipalities and is usually the preferred choice of house hunters with the aim of applying for a Golden Visa. To these, one must add the municipalities which come under the city of Pereaus (which is effectively joined up with Athens). If we also add the municipalities to the east and west of Greater Athens (which locals refer to as being Athens) then the number rises to more than 60. Within each municipality there are the good and not so good parts. Also, there can be notable variations in property values and demand and supply dynamics. Value variations also exist arising from the age of different buildings, different neighbourhoods, technical characteristics, and facilities available such as parking and storage.

In addition, and if the property is to be rented out, one must also consider the mode of rental i.e., short, or long term, the desirability of the area and of the specific property for the purpose. Issues relating to furniture, appliances and equipment, property management, the collection of rentals and of taxation are also very important. Also important is to consider forthcoming legislation seeking to regulate short-term rentals and its effects on net yields.

Overall, the potential buyer must ensure that he/she or his/her advisors are knowledgeable in the following:

1. The various municipalities, their characteristics, property market dynamics and desirability.
2. The factors which affect current value, future value retention and the factors which can cause future economic obsolescence.
3. Technical matters as they relate to earthquake resistance and compliance to current standards, to energy efficiency, and to quality of materials and construction.
4. Legal and procedural matters relating not only to the purchase of the property but also its rental and the taxation of rental income.
5. Rules and procedures relating to secure money flows and account opening with banks.

In the case of buying property for the purpose of securing a Golden Visa, the advisors must be in command of the provisions of the PR Programme and the procedure to be followed.

An important consideration is being able to ascertain the value of a property, especially if such a property is old. New properties have a development cost of €2,000-2,500/sqm (all-in except land) depending on quality and specifications. The land cost element of the value starts at a minimum of €300 per square metre of building in the backwater areas rising to about €2,500+ in sought after locations. Therefore, buying a newly built property at less than €3,000/sqm is becoming very rare and prices in the sought-after municipalities can reach €8,000 or more.

The situation with older properties is more complex and a detailed examination of each must be carried out by professionals. The prices of old properties were artificially inflated as demand for them surged in view of the then forthcoming increase in the investment threshold for the Golden Visa to €500,000 in some municipalities. As a result, the prices of unsold old properties in these areas declined drastically, sometimes by about 30+%, when the threshold increased to €500,000. Thus, buying these old properties has become very costly. This cost will rise further still when buyers discover that old properties come, alas, with old problems.

Note: More information on how to select a property is to be found in our article: Investing in real estate in Greece-criteria for selection.