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At the level of the first half of the year, the fall this year is 49.5%, since a total of 371.3 million euros were invested, from 736 million euros in the corresponding period of the previous year.
At the lowest point since 2017 is the real estate market, in terms of investment demand from abroad. According to the Bank of Greece, during the second quarter of this year, foreign capital inflows for the acquisition of real estate in the Greek market fell by 60% compared to the same period last year and amounted to 140.6 million euros . from 344 million.
This is the lowest performance since the third quarter of 2017, when the relative size had reached 170 million euros, marking the beginning of a “golden” period for the national real estate market, not only in relation to the years of economic crisis , but in general, as never before had attracted such a large amount of capital from foreign investors.
It is characteristic that in 2019, more than 25% of direct foreign investment, made in the country, is real estate. In particular, 1,500 million euros were invested in the acquisition of properties, out of a total of 4,400 million euros in total investments. But the outlook has started to reverse this year as a result of the pandemic, which initially limited the ability of foreign investors to visit the country and buy real estate.
At the same time, however, it pushed various stakeholders to review their original plans, in order to assess the situation that will develop in the economy, both Greek and global.
Thus, during the first quarter of this year, when the problem of the new coronavirus in China had begun to become apparent, the first “squeaks” appeared in the Greek real estate market. Capital inflows were limited to 230.7 million euros, from 419.3 million euros in the last three months of 2019 and 392.7 million euros in the corresponding quarter of 2019. That is, there was an annual decrease in the 41%.
At the level of the first half of the year, the decrease this year is 49.5%, since a total of 371.3 million euros were invested, from 736 million euros last year. As for the continuation of 2020, it is expected to be even worse, since not only did it not reduce the effects of the pandemic, but on the contrary, the prospects for a rapid economic recovery worsened, as a result of the escalation of cases, which they have intensified investor uncertainty.
The problem in the Greek real estate market is multiple, as both driving forces of foreign demand have been affected. Specifically, both the investment activity for the exploitation of short-term rental accommodation and the acquisition of properties for the residence permit in the country, within the framework of the “Golden Visa” program, have been negatively affected.
According to the latest data available from the Ministry of Migration Policy, from the beginning of the year to the beginning of September, only 368 new permits were issued. Since the start of the corresponding program, 7,903 investors have taken advantage of the opportunity offered, proceeding to purchase properties for a minimum value of 250,000 euros. By the end of 2019, the relevant number had increased to 7,535 licenses, compared to 4,107 licenses at the end of 2018.
As you can see, 2019 was a record year for the advancement of the program, since a total of 3,428 licenses were granted, a figure that means that at least 857 million euros entered the country for real estate purchases, or almost 50% of the total amount of investment Property. In fact, that figure exceeded one billion euros, since, according to the heads of specialized offices in this market, most investors choose properties worth 300,000 euros or more.
