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Market Situation

  
Greece is a country where homeownership is highly valued. Of the 11 million citizens, 70 percent own their own homes, giving Greece one of the highest homeownership rates in the European Union. A large part of the country's population (3.7 million) resides in and around Athens, the capital city. About 50 percent of the population own a second home, usually outside the cities in the countryside or on one of Greece's many beautiful islands.1

After a period of economic hardship in the eighties and early nineties, Greece's economy has benefited from economic policies put in place in order to facilitate its entry into the EU in 1981. Inflation has fallen from 20 percent in 1990 to a current rate of 3 percent, and the deficit has been cut to less than 1 percent of GDP. Greece's GDP in 2001 totaled US$120 billion, and grew at a rate of 3.5 percent annually which is higher than the average GDP growth rate of the EU as a whole. Further efforts to tighten economic policy were made to gain entrance into the EU's European Monetary Union in 2001.

Nearly 70,000 U.S. citizens currently live in Greece, making it the seventh largest home for Americans living abroad. Conversely, about 142 thousand Greeks live in the U.S., with an average immigration rate of about 1000 per year. While specific numbers are not available, in 2000 the U.S. invested US$152 million in "finance/insurance/real estate".2

From 1997 to 2000 residential real estate prices increased 26.5 percent due to a fall in interest rates, a rise in income and foreign investment, and increased demand. Similarly, commercial property prices rose 24.8 percent.3 Athens has experienced even more severe increases in property prices. Space is at a high premium in the city, making the suburbs a popular option for many homebuyers. Typical home prices in the city average around US$135 per square foot, while luxury home prices are in the US$185 to 280 per square foot range.4 A new airport and an expanded rail system are examples of enhancement intended to improve quality of life in the city in preparation for the hosting of the Olympics in 2004. Restrictions on automobiles have helped to reduce pollution, a problem that has plagued the city for years. The City's office market is expanding towards the suburbs as well. Prices for premium downtown office space average around US$3.50 per sq. ft. per month, with rates in the suburbs averaging US$2.75 per sq. ft. Please see the Chesterton Blumenauer Binswanger website for a detailed report on the Athens commercial property market.

Greece also features a broad sweep of islands which are popular amongst tourists and locals alike for their beautiful beaches and vistas. It is common for many Greeks to own a second home on one of these islands. There is a broad housing price differential from island to island. Mykonos, for example, is one of the most popular and expensive of the islands. Land prices alone can range from US$86,000 to $287,000. Of course ocean views and proximity to beaches and towns have a significant impact on the price of land. Other islands offer equally beautiful settings for less money. On Kinthos, for example, prices for buildable plots of land range from US$28,000 to $115,000.5 It is important to note that there are two classifications of land on the islands. Land plots which are outside of a town-planning scheme (ektos schediou) are not buildable, and therefore command lower prices. Land upon which building is allowed (entos schediou) is priced higher in accordance to its higher use value.

U.S. multinational real estate firms that operate in the region include: Chesterton Blumenauer Binswanger, Remax, ERA, and Coldwell Banker.



Political Environment

  
Greece is established by it's constitution as a parliamentary democracy. Primary executive power rests with the prime minister, who is usually the head of the party with a majority in the parliament. The president, a largely ceremonial position, is elected by the parliament to serve a 5-year term. The parliament is made up of 300 members who are elected by popular vote to 4-year terms. The country is divided into 51 prefectures, each headed by an elected prefect. The prefectures are further organized into 13 regional administrative regions (peripheries) headed by an appointed governor (periferiarch). Despite EU efforts to devolve more power to these regional governors, Greece still maintains a strongly centralized government famous for its high levels of bureaucracy.



Real Estate Practices

  
Real estate practitioners in Greece must be licensed by the government. Requirements include graduation from high school, lack of a criminal record, and membership in a local chamber of commerce. There are an estimated 700 to 800 agents operating in Greece, many of whom operate independently of any franchise. Typical commissions range from 3 to 6 percent, split evenly between buyer and seller. There is no centralized multiple listing service. The Hellenic Association of Realtors is the only organization that claims to represent real estate practitioners on a national scale. The organization maintains membership requirements in addition to government licensing.

While property taxes are not especially high in Greece, the process is relatively complex, requiring an owner to pay up to 14 different taxes related to their property. Notably, there is an 11 percent property transfer that is paid by the buyer during a transaction. A comprehensive land registry system is currently being implemented all over Greece, however, many properties remain unregistered.

the HAR, International Consortium of Real Estate Associations, and the University of Denver provide additional information on real estate practices in Greece.

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Land Rights/Usage

  
Greece is still in the process of developing a modern universal land registry system. This can result in problems for owners if a thorough title search was not carried out before purchase. With its long history of emigration, undiscovered owners can be as far afield from Greece as Australia, and may have multiplied with the generations. Some analysts advise the use of a local Greek lawyer, and only a Greek architect can legally submit renovation or building plans to the local authorities.2

The purchaser of real property in Greece is responsible for the payment of the real estate transfer tax, which ranges from 9-13%. This tax is waived in some circumstances, such as for the purchase of a primary residence. There is also an annual tax on real estate levied by local governments at rates of 0.025-0.035% of the property's valuation.3



Foreign Ownership

  
Foreigners can own property in all regions of Greece, with the exception of land on or near the country's borders. No prior approval is required to purchase property not included in these so called "border areas". Persons from an EU country may apply for a waiver of this prohibition. It is important to note that Greece does have restrictions on the re-export of funds by foreigners. A foreigner owning property in Greece may sell that property, but all profits gained above the original price paid for the property must remain in a special bank account designed to keep the funds in Greece.



Recommended Resources


  
General

Country Commercial Guide 2002

CIA World Factbook

U.S. Embassy in Greece

Greek Embassy in U.S.

Living in Greece (escapeartist.com)

Overseas Private Investment Corporation (lots of good general links)


Real Estate

Hellenic Association of Realtors

International Consortium of Real Estate Associations

University of Denver Global Real Estate Project--Greece

10 things to know about buying property in Greece

Global Real Estate Tax Summary--Greece

Greek laws dealing with the purchase of property

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Endnotes

1. Hope, Kerin. "Second homes very popular". Europe, Jul/Aug 1998.
2. "2001 Country Reports on Economic Policy and Trade Practices--Greece". U.S. State Department website, February 2002.
3. Kanellopoulos, George. "Greece's property market heats up". Athens News, Nov. 3, 2000.
4. Mitropolitski, Simeon."Real estate market in Greece". www.ired.com, 2000.
5. Pirovolakis, Christine. "What's the price of island paradise?" Athens News, June 30, 2000.
2002


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