The Greek Tourism and Property Markets

It's easy to believe that the success of one nation's tourism market goes hand-in-hand with the subsequent successes of its property market. This is particularly easy to accept in the Mediterranean region where so many British, Irish and Northern European citizens dream of spending their summer evenings and an almost equal number seemingly dream of owning a holiday bolt-hole or retirement retreat. However, in reality not every Mediterranean market does have as popular a property market as it does a holiday market.

Destination Perfection?

Take Greece for example – the Greek mainland and the Greek islands are almost the epitome of 'destination perfection' yet Greece is not famous as a second home nation. Of course there answers as to why this is the case; the truth lies somewhere in a complex web of bureaucracy, rather socialistic politics, old-fashioned laws, lack of financing and high taxes.

However, all that is beginning to change as Greece is keen to attract overseas buyers to its shores and willing to listen and learn from the mistakes made in other Mediterranean destinations. So, if you're looking for a location in which to make a second home purchase and a profitable investment decision at the same time, Greece could very well be the country you should be looking at in 2008.

So why consider Greece?

In its latest special report on the travel and tourism economy in Greece, the World Travel and Tourism Council (WTTC) praised the previous minister of tourism for bringing strong leadership and sound strategy to Greece's previously under-performing tourism market.

According to the WTTC, while Greece is already doing well in terms of the amount of market share it commands, (Greece has a 10% share of the Mediterranean tourism market); it could do far better given its natural assets and attributes. The WTTC cite issues such as governmental under-spending on the sector, bureaucracy, sub-standard facilities and restrictions on capital investment as having held the market back.

A change in direction…

Fortunately, in 2004 a change of government and a total change in political direction in Greece have resulted in a steady change in direction - for the economy and for certain specific economic sectors in particular, such as tourism and real estate. Everything from the high unemployment rates, heavy taxation levels and endless red tape are now changing for the better.

The current minister of tourism, Aris Spiliotopoulos, sees the promotion of Greece as an obligation, not a privilege. In his speech at the official presentation of the new promotion campaign of Greece Abroad, he said that his intention is to show the world that Greece has the same capacities, services and infrastructures as the rest of the developed countries in the European Union.

Through the eyes of an investor

From an investor's point of view, the landscape is definitely improving in Greece. Tourism numbers are increasing year-on-year with the WTTC now predicting up to 3.7% growth in personal travel and tourism annually over the coming years. The government has also received significant amounts of money from the EU for spending on infrastructure improvements – €48 billion between 2000 and 2004 alone.

Piraeus Bank UK, one of Greece's most innovative and influential banks, has also just made borrowing in order to buy in Greece, that much easier and attractive, through its UK operations.

Encouraging investment

Where once a socialist government stifled an emerging property market in Greece with its restrictions on foreign ownership and heavy taxation on profiting from real estate, today, a forward-thinking government is encouraging investment and allowing institutions such as Piraeus Bank UK to provide its 'High Value Invest Product for Greece' specifically to British, Irish and expatriate investors.

The desire to attract foreign investment into the property market has seen policy and taxation reform as well – if you now reinvest profits derived from capital appreciation of your real estate assets for example, you can avoid capital gains tax, and foreigners can buy property unrestricted in Greece now.

What's more, the Greek property market has some high-end assets of particular interest to overseas buyers seeking strong rental returns and the potential for some attractive gains. This is why the 'High Value Invest Product for Greece' from Piraeus Bank UK is for those with minimum income levels of £75,000 who require financing or refinancing for property in Greece valued over €500,000.

The 'High Value Invest Product for Greece'

The product is specifically for investors because, depending on the location of the property purchased, between 50% and 75% of projected market rental income can be taken into account towards mortgage repayments. Buyers using this product also get the advantage of an interest-only period of up to 10 years while borrowing up to 80% loan to value in Euros, Sterling, US Dollars or Swiss Francs. Interest rates on a repayment loan currently start at 5.25% (or 5.50% for interest only) for loans denominated in Euros.

"The Greek government is looking to the long-term in encouraging foreign investment and it is our policy to actively assist property buyers looking to make both lifestyle and investment choices in Greece," explains Irini Tzortzoglou, head of retail banking at Piraeus Bank UK.

"We specifically invite British, Irish and expatriate investors to talk to us when considering the almost untouched wealth of opportunities of the Greek real estate market."

For more information on the Piraeus Bank UK mortgage products and services call 0845 603 6538 or visit the website www.piraeusbank.co.uk

Source: Ashton Billige Property Marketing Ltd., and Piraeus Bank UK.

© PropertyIndex.com 2008 | Last Updated: 27 March 2008