The cost of Greece’s economic resurgence

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ATHENS — Less than a year after Greece went through an international rescue program costing billions of euros, its capital is experiencing an investment boom. Trendy new hotels with views of the Acropolis populate the skyline. Construction workers are demolishing homes because cash-strapped Greek landlords are converting them into short-term rentals, new luxury homes for foreigners or Airbnb properties.

Thousands of visa applicants – including a significant portion of Chinese investors looking for cheap property – are flocking to the capital, as well as the islands of Santorini and Corfu, in search of homes to serve as a European base. .

Under pressure from Greece’s protracted financial crisis, local landlords are trying to cash in on the investment boom by selling apartments or renting their homes to tourists, in a frenzy that is changing the housing market.

The new arrivals are driving Greece away from the so-called golden visas that other crisis-hit countries like Portugal and Spain have used for years to attract investors and as a strategy to fuel economic recovery. Spending a minimum of €250,000 on a home in Greece guarantees a renewable five-year visa.

The trend of property purchases by foreigners started late in Greece – partly because the country’s debt crisis has plagued the country since 2011 – but it has become a popular destination for those with enough money. In 2013, the government started offering visas, which also attracted investors from Russia, Turkey and the Middle East.

However, radical change comes at a cost. Although rising house prices are benefiting homeowners, prices are driving renters away. Families still struggling to recover from the crisis are leaving working-class neighborhoods as demolition companies arrive.

“It’s like what happened in Barcelona, ​​where everyone was forced to leave the center,” said María Dolores, a young artist who lived in this Spanish city before moving to Athens a while ago. four years. In November 2018, Dolores and three housemates were evicted from a space in Athens where they were paying rent of 400 euros a month because the landlord planned to rent it out on Airbnb or sell it to a stranger.

Carrie Law, CEO of property investment group Juwai.com, said Greece was an economic disaster but has become a top destination for China’s middle class due to the visa program. The Chinese feel comfortable in Greece because state-owned companies such as Cosco, which owns the majority of Greece’s port of Piraeus, have already invested there, according to Law.

Property prices in Greece are recovering after a 40% decline that began in 2010. Greece almost left the euro zone in 2015 but has since stabilised, reviving investor confidence and tourism; last year there were a record 33 million visitors.

Major investors, including Thomas Cook Airlines and Wyndham Hotels, are pouring billions of dollars into the tourism sector. Dozens of hotel and resort projects are open or under development, according to Enterprise Greece, the government’s investment and trade promotion agency. “We see that investors have regained confidence in Greece,” said Grigoris Stergioulis, director of the agency.

Many investors are trying to make money by converting properties into lucrative short-term rental property for tourists, which has quadrupled in five years; This situation has reduced the number of houses with affordable rents for Greek citizens. On Airbnb, more and more rental properties are being advertised for tourists, prompting the government to consider possible restrictions.

Argiro Fouraci, 29, recently started renting out five apartments that had been in his family for years. Fouraci was a teacher but lost her job during the crisis and struggled to get by until she started listing properties, located in the popular Koukaki neighborhood near the Acropolis, on Airbnb. Fouraci mentioned that he now earns around 400 euros per month for each apartment, after taxes and management fees.

The income is used to care for his parents, both aged 60 and whose pensions have been drastically reduced. They in turn support Fouraci’s brother, who has just opened an electronic cigarette store. “Most of my friends are still unemployed,” Fouraci said. “Now I can earn a living and help my family.”

The same real estate deal improved the fortunes of Stavros Siempos, 53, owner of Pantopolion, a shop in Koukaki that sells feta cheese, olives and other traditional Greek products. Siempos lamented that many Greeks have left the neighborhood due to the increase in prices generated by the use of Airbnb: “We no longer have Greek neighbors; we have Airbnb neighbours.” However, he added that it was good for business. “We are better off now, because tourists have money.”

While Airbnb is making progress in the country’s real estate sector, Greece’s golden visa program has opened up its housing market and changed its pricing structure. Checking the property listings, it is evident that many mid-size apartments in Athens, Thessaloniki and the Greek Islands are priced right at €250,000, the minimum needed for buyers to qualify for the visa program.

The program has attracted some 10,000 investors from China, Russia and other non-European Union countries, which have produced around 1.5 billion euros for Greece’s real estate sector over the past five years, according to Enterprise Greece. . Chinese investors represent more than 40% of visa buyers.

Activists warn that these investments, along with the proliferation of Airbnb properties, have sparked a housing crisis that threatens entire communities.

Dolores, the artist who was evicted with five roommates, said a foreign investor had also bought a building where her employer, the non-governmental organization AMOQA, which researches and promotes art and sexuality and gender studies.

“Now the investment company will convert the building into apartments,” Dolores said. “In addition to people and families, collective spaces and neighborhood networks are also displaced and disappear from the map.”

“It’s like a domino effect,” he said. “The most vulnerable are the losers.”

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