GREECE: Russian demand for Greek property soars as prices plummet and cash-strapped Europeans slow down on purchases amid deepening economic uncertainty

Record ID: 602764

  • Title: GREECE: Russian demand for Greek property soars as prices plummet and cash-strapped Europeans slow down on purchases amid deepening economic uncertainty
  • Date: 1st June 2012
  • Summary: KALLITHEA, KASSANDRA PENINSULA, GREECE (MAY 28, 2012) (REUTERS) COASTLINE VARIOUS OF BOATS IN SEA HOUSE WITH 'FOR SALE' SIGN ON IT SIGN ON HOUSE READING IN GREEK 'FOR SALE' HOUSE WITH 'FOR SALE' SIGN ON IT ATHENS, GREECE (RECENT) (REUTERS) PRESIDENT OF GREEK REAL ESTATE AGENTS FEDERATION, YANNIS REVITHIS AT HIS DESK IN HIS OFFICE REVITHIS HANDS WRITING (SOUNDBIT
  • Embargoed: 16th June 2012 13:00
  • Keywords:
  • Location: Greece
  • Country: Greece
  • Topics: Business,International Relations,Economy,People
  • Reuters ID: LVAU6AV6LIOOBCVDB6NHRRG4KVI
  • Story Text: Russians are flooding the Greek real estate market, local industry officials say, as the country struggles through the worst economic crisis in recent history.
    The two countries have a long history of cooperation. But it has deepened in the past two or three years with Greek real estate agents hiring Russian expatriates and learning their language in response to a soaring Russian demand for small getaways in the Mediterranean.
    Bank of Greece statistics show a 30 percent drop in the price of real estate over the past three years as a result of the economic crisis. The President of the Greek Real Estate Agents Federation, Yannis Revithis, said that has made buying property and holiday homes more attractive to Eastern European and Russian buyers.
    "We would say that there is an increase in demand of at least 200 percent from interested Russian buyers and this shows also in the demand for tourist accommodation from Russians (which increased) by at least 100 percent, as we have been informed by tourist agents. So we see a huge shift in Russian interest and by Russians in the Greek market," Revithis told Reuters Television.
    German, British and French buyers have for long dominated the holiday housing market but as demand from them has dried up during the crisis, Russian buyers have stepped in.
    Russian real estate investors are undeterred by the country's political and economic woes and have been snapping up top price property as well as more modest homes. And whilst many Greeks are looking outside the country to invest their money fearing a possible exit from the euro zone and a messy return to the Drachma Russians see Greek woes as an opportunity.
    "There are many who are billionaires and want to buy a summer house for several million euros and there have been plenty such examples in the last year. But also many are interested in small apartments of about 60, 80, 100 square metres which they want to enjoy during the summer months or others who are pensioners come here for longer periods," Revithis said.
    The head of the Greek-Russian chamber of commerce, Zoi Kuprianova, says Russians are interested in buying on traditional tourist routes though they appear to prefer forested areas with mild climate, such as the Chalkidiki Peninsula in Northern Greece or the islands.
    Small towns in Chalkidiki and most of the island resorts already have Russian-speaking tour guides and Russian menus in restaurants.
    "If we take Chalkidiki - because it is very popular among tourists - we can say that 80 percent or 70 percent are Russian buyers. Or if we take Crete for example, we can say it is 40-50 percent of buyers are Russian - this is just the last two-three years, because before there were more British and German buyers in Crete. But in the past few years Russians are frequent and welcomed guests there," Kuprianova said.
    Experts say Russians are buying houses, villas, hotels and even small islands all over Greece.
    Cheaper prices have not been the only incentives for Russian investors. The fist big spike in Russian purchases was in 2011 when Greek authorities cancelled restrictions on acquiring property in the north and on some islands, which were considered 'border zone' areas important to national security and meant buyers had to wait for months to get clearance from the Greek Defence Ministry.
    Kuprianova says that the political situation after recent elections in May has negatively impacted the level of interest but primarily of large-scale Russian property investors, who have been holding off on major deals anxious the country might quit the euro.
    However, for small investors who want to buy vacation houses - and those represent 80 percent of the Russian buyers - for them Greece will remain attractive with or without the euro, Kuprianova says, adding that Russians are less risk-averse than other nationalities.
    In recent months Russians were the main buyers in Kassandra province on Chalkidiki, one of the most popular Russian tourist destinations, a local real estate agent said.
    "With everything that's going on at the moment in Greece, it is difficult to say how business will go, but certainly there is a general interest by the Russians to invest in Greece, they see it as a friendly country, they see the religion (that is similar), they see the friendliness and the hospitality from the Greeks, and, certainly, the prices have become more attractive for Russians and we have a rise in sales in the past six months," said Constantinos Petridis a realtor at Mouzenidis Real Estate Agency in Kallithea town on Kassandra province.
    Revithis said the Greek Real Estate Federation was already in talks with the foreign ministry to ease the visa regime for those Russians who buy property in Greece, and even to provide citizenship for those who invest over a million euro into the country's real estate.
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