Israeli investors flock to Greece
The current Greek recession and plummeting real estate prices attract Israelis looking to buy villas, assets for investment or businesses.
Israeli investors in Greek real estate can be divided into three groups: those interested in building a villa or a holiday home near the beach for the summertime or vacations; those purchasing assets for investment purposes to obtain a good and stable yield and those interested in buying a business such as a hotel and are prepared to permanently move there.
Prices vary dramatically depending on the location: In Mykonos, one of the most expensive islands in Greece, one can purchase a 2320-square-meter plot of land with a 176-square-meter villa for a million euros. Crete, also considered expensive, one can purchase an 80-square-meter villa for 139,000 euros.
In Pelion peninsula, a villa of 270 square meters goes for 495,000 euros. In the less expensive islands villas can be found for about 250-350,000 euros for a dunam and a half, including a private beach, with prices rising the closer one gets to the sea. In Athens, an 80-square-meter apartment goes for 55,000 euros. In Thessaloniki prices are higher, with a 65-square-meter apartment going for 70,000 euros.
A dramatic drop in prices
Until recently, Greece troubled investors around the world due to its enormous debt. The big concern was a possible exit of Greece from the eurozone, a move that might have created a domino effect and have negatively affected the the eurozone countries, especially Italy, Spain and Portugal.
This horror scenario was avoided thanks to the huge aid package from Germany and the IMF, Greece's austerity program and the recent Greek elections which assured continuation of the austerity program. These factors calmed investors and allowed them to reconsider Greece as a an attractive place to invest.
Rodole Michilido, a Greek lawyer who lives in Thessaloniki, accompanies Israeli investors in Greek real estate and has seen a rise in demand.
"Israeli demand existed since 2009 and a lot of transactions were carried out," Michilido recounted. "Greece has always been popular among investors but until recently real estate prices were very high. Following the financial crisis that struck the country, there has been a dramatic decline in real estate prices and this explains the increase in demand.
"The atmosphere in Greece is a very friendly and welcoming. There are many Jewish institutions, mainly in Athens and Thessaloniki, and beyond that Greece is in the EU and NATO. The best explanations for the increased demand is that there are excellent opportunities in the country, and the fact that Greece is seriously encouraging foreign investment."
From Mykonos beach to Thessaloniki
Michilido emphasized that there is interest in all regions of Greece. "There are areas that are more suitable for investment and others more suitable for recreation," she explained. "In general, demand for the islands is very noticeable - for example, Mykonos, Paros, Antiparos, Lefkada and others. Thessaloniki and Athens are more appropriate for commercial investments, apartment rentals or the purchase of businesses like hotels, supermarkets, shops and offices."
With regard to potential risks in buying properties in Greece, Michilido notes that the guidance of an attorney is necessary. "One must examine the assets accompanied by lawyer to ensure no hurdles in terms of the law. An attorney has to manage the bureaucracy and paperwork involved in a purchase . I am convinced that there is no real risk if one is accompanied by the right attorney," she added.
For Israelis Greece has never been a particularly popular destination for real estate investment abroad, and it is certainly not comparable to Israeli demand for real estate in the US. Investment in Greece is still not as strong as in other parts of the world but it seems that along with the uptick in tourism Israeli investors are beginning to show interest.
