Investing in real estate oversees has become increasingly popular. After the collapse of its real estate prices, Greece has become an attractive option for many. House prices are still falling after almost six years of declines, but now at a slower pace and many expect the trend to reverse itself.
In Athens, the capital and the country’s largest city, the average price of apartments plunged by 10.87% (-8.89% inflation-adjusted) in 2013 from a year earlier. In Thessaloniki, the second largest city, house prices dropped 7% (-4.9% inflation-adjusted) in 2013 from the previous year. But house prices actually increased by 2.2% (1.8% inflation-adjusted) q-o-q in Q4 2013.
To revive the ailing housing market, the Greek government recently offered residence to non-EU investors purchasing or renting property worth over €250,000. The residence plan, which is similar to measures adopted by Hungary, Spain and Portugal, is valid for five years and open to renewal.
Greece has been granted two successive rescue loan packages since May 2010 by European leaders and the International Monetary Fund (IMF) worth €110 billion and €130 billion, tied to a stiff austerity package. The austerity measures imposed by the government include:
- Tax increases
- Spending cuts
- Privatization of government-controlled corporations
- Slashing salaries
- Slashing pensions, especially for high-income retirees
- Taxing low-income earners. The taxable income threshold would be reduced to EUR5,000 from EUR8,000
- Placing about 30,000 public workers in labor reserve
Other reforms include stronger laws against tax evasion, liberalizing the labour market and selling state assets.
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