gloomy outlook for greek property market
News Posted On: 06 August 2010
Despite the piles of negative press Greece has received in recent months, it is surprising to note that you can still read reports that suggest the Greek property market will roll along blissfully ignorant of the socio-economic tragedy befalling the country around it.
Amidst these positive reports surfacing on a pool of negativity, what is the truth; has the Greek property market been affected or not?
The answer is: not really, not yet.
First of all it is important to differentiate between the residential housing market, and the property markets in areas where foreign buyers are heavily prevalent.
The latest data on the residential housing market showed a barely noticeable effect, but the situation has worsened since the period we currently have reliable data on.
When it comes to the foreigner dominant markets, reliable data is all but non-existent; the only data we get comes from agents and they are obviously going to be secondary sources, because of their proneness to be biased.
However, when you look at the aforementioned socio-economic catastrophe mentioned above, it occurs that these regions cannot fail to be affected.
If real fears over the Greek nation's ability to make good on its debts, and subsequent EU bail-out weren't bad enough, labour protests (and occasional riots) have begun breaking out across the country, as people feel the bite of the government's harsh austerity measures. The British Embassy and many others are warning tourists of the disruptions the protests are likely to cause.
And if all that weren't bad enough, we recently had a newcomer Greek terrorist group threatening the tourism industry. The threat has been taken with a pinch of salt in official circles with the British Embassy maintaining the same warning over the protests.
Terrorist threat or not, I have kids and if I had booked holidays in Greece I would be looking for a refund, even just to avoid the disruptions over protests. It is just not an environment condusive to enjoyable holidays right now.
The tourist industry is a big part of the Greek economy, and a crash there will spell declining property prices in both sectors mentioned above. Meanwhile the lack of demand from foreign buyers, who will no longer want a holiday home there, and doubt any claims of investment potential, will also cause prices to fall further and faster in the foreigner dominated areas.
But out of all that, when the clouds clear 6-12 months down the line, buyers will almost certainly return looking for bargains.
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