RHODES, Greece, June 30, 2011 /PRNewswire/ — Savvas Savvaidis, managing director at Savvaidis & Associates and ex – President of the Hellenic Association of Realtors was recently invited as a key note speaker at the Greek Real Estate Convention.
His message was strong; the recovery of the Greek economy is not possible without the recovery of the Greek Real Estate market.
According to Mr Savvaidis the green light has been finally given to a critical sector of tourism in Greece, “the golf tourism”; investing in the golf industry is very expensive. The key to addressing the high cost of investment is the development of housing within golfing resorts, this provides a considerable amount of financing for the project whilst at the same time profits from house sales enhance the feasibility of the whole operation still further.
The same logic is practiced by “condos” which instead of villas offer hotel rooms for sale.
The benefits of the above “mixed” developments are manifold; enhancing government liquidity by selling off government owned land to investors, a boost in the construction industry and ultimately “quality” tourism throughout the whole year.
However, the above [golf resorts] alone is not enough to “stir” the real estate market in the area of second homes as it covers only 20%-30%% of the demand. The majority of demand from foreign buyers is for property close to urban facilities and neighborhoods.
There is a wealth of “second homes” in Greece with many varying types and design to satisfy the majority of the market demand. Our Real Estate market does not suffer from a lack of supply. The Greek real estate market suffers from a lack of demand just the same as any other Mediterranean destination.
It is a well known fact that demand for second homes has fallen significantly in recent years because of the global economic crisis. Let’s not forget that a second home is not a basic need.
The government however does have the ability to stimulate the demand for second homes by adopting a series of measures that will make the Greek market far more competitive and more in line with other Mediterranean destinations, the below suggestions to mention a few;
1. A reduction in VAT on the purchase of new build properties from foreign buyers to 10%; the equivalent amount of VAT applicable today on a new build property in Spain and Italy. The current VAT rate of 23% puts Greece out of the market.
2. A reduction in transfer tax for foreign investors to 5%. The injection of capital into the market and the development of the real economy will benefit our economy far more than the current meager income from VAT and Transfer Tax.
3. Removal of the ban on non-EU citizens purchasing real estate in border areas. The current law allows for a lifting of this ban, on an individual basis, which usually takes 18 months!
4. Simple licensing procedures by the by the Greek Tourist Board to allow rentals of second homes for a tourism use. The renting of such homes is an essential first step for at least 50% of potential buyers. To allow only the rental of residences that are embedded within the new mixed developments will create serious distortions in the holiday home real estate market.
Savvas Savvaidis concluded that there is no doubt that the planning of “mixed” tourism developments is excellent news. Even better news would be the adoption of immediate fiscal measures. The injection of capital from the second home market in Greece would stimulate the real economy.
Savvaidis re-iterated that the recovery of the Greek economy is not possible without the recovery of the real estate market.
