Introduction
Greece was one of the most fortunate countries during the pandemic due to the Greek government’s prompt reaction and measures taken to restrict the spread of the virus considerably compared to other European countries.
The impact of Covid-19 on real estate and investment opportunities needs to be investigated. Following the blow on the world economy, we can only assume that property investments will experience similar results to some extent, however, because the government passes compensation measures to mitigate the effects.
Property Investments
COVID-19
#1. Investing in Residential Properties
As a result of the recession during the past years in Greece, construction was put on halt, thus few new residential buildings were built. Projects under construction are still to be completed, and new projects will most likely be delayed. But foreign buyers prefer new, modern buildings as they are readily available for use. If there is more decline in employment rate we can expect loan defaults and a reduction in old property values. As property prices have been quite low even after a slight increase noticed in 2017, prices are expected to remain reasonable. Except for cases where individual owners may be in immediate need for cash and are ready to sell under the market value. This is an opportunity foreign investors should not ignore. For such opportunities, a trustworthy buyer advisor is what every foreign investor needs to have in Greece.
#2. Commercial Real Estate Investment
On the other hand, commercial properties undergo a completely different experience as retail stores and businesses were most severely affected due to the lockdown. It may be difficult or even impossible for some to return to “normal”. Vacancies and rental reductions are expected to follow with all the related negative consequences.
During lockdown and quarantine period consumers also changed habits and switched over to online trade and transactions. Even senior citizens are now more knowledgeable with e-shopping and prefer it instead of running to the stores, as it is more convenient and Covid- safe for them. So, it can be assumed that the consumer adaptation towards online commerce will definitely influence retail properties.
#3. Office Property Investment
Greece lacks modern office space. Even though some interest was seen before the pandemic, it remains to see what will happen in the future. As online trade is on the increase the demand for office space may fall considerably. Another matter to consider seriously is the ‘work from home’ that was practically forced on to office workers during the quarantine period. But now, seeing its advantages, it has become the new norm for many. Although In smaller cities it may not be so serious, still foreign investors are more interested in major cities. So, property value will not follow the same route in cities as it will in Greece mainland.
#4. Tourism Real Estate Investment
Despite hotels having remained closed for a considerable time when they reopened a great effort was put to make up for the loss of the previous months. For the time being, it seems that some managed to break-even and survive. On the other hand, some hotels were not so lucky. They may want to sell at favorable terms which may interest foreign investors.
In addition, wanting to invest in a summer home, it may cost more. Greece offers the best seas, landscape and of course climate. It is a top-holiday destination.
Being one of the safest countries to visit during the unprecedented summer of 2020, Greece is the first priority for holiday investment property. Holiday property values will remain stable and in some cases will even increase.
#5. Logistics Real Estate – A new opportunity
The market for logistics real estate appears to be quite promising. Even before the pandemic, but more so now because of the rapid growth of e-commerce, changing consumer needs, the need for logistics space is now in greater demand than a few years ago. In Greece, it is estimated that online trade has almost doubled recently. It is a promising market, and needs more space to respond to new requirements sufficiently. The growing trend of e-commerce calls for shorter delivery routes to make faster delivery possible for more online orders. The outskirts of major cities offer many opportunities for investments in logistics real estate.
#6. E-governance
The present government has implemented online interaction with the public sector, making a shift towards e-governance. The new Ministry of Digital Governance in 2019, announced specific plans to tackle unnecessary bureaucracy. This will have an impact on productivity and economic growth. The unforeseen covid-19 virus has accelerated the implementation of this shift to e-governance, and Greece has entered the pandemic with much stronger foundations. This gives foreign investors an advantage of finalizing their property acquisition faster and more economically. In the business world time is money.
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Conclusion
The Covid-19 pandemic does have a negative impact on the country’s economy. But in the case of the real estate market in Greece, it will not last long. It is expected that any property value fluctuation will be short-lived and the situation will have improved by next year. As previously stated, property prices had decreased considerably during the recession period. It is believed that even if they drop more it will not be below what was a couple of years ago. Greek property owners are hard to bargain with and refuse to sell below value.
Therefore, when prices are already low, what one can expect is an increase in the post-pandemic time. This gives Greece the advantage over other countries. Investing in real estate is very lucrative in Greece compared with other ‘more expensive’ countries. The post-covid-19 period promises many opportunities for project developments in the country. Affected property as in tourism, will more likely emerge which will be most appropriate for investment. Furthermore, construction and renovation costs will also be more reasonable.
All considered, Greece is a good opportunity to proceed for the right investment, and benefit from pandemic consequences. As it is said, “behind every cloud there is a silver lining”. While the Covid-19 pandemic wreaks havoc throughout the world, economists express conflicting views on its implications. Yet, it is strongly believed that 2020 will be a great year to invest in the Greek real estate.
A professional property consultant can assist you by dealing with this particular part of the process on your behalf allowing you to dedicate your precious time to your own business schedule. If you are interested in further details, do not hesitate to contact us or you can book a complimentary free consultancy session at your convenience.