CHINESE BUY GREEK HOMES SEEKING TASTE OF GOOD LIFE
ATHENS: Three times a week, hundreds of Chinese investors arrive at Athens airport to be greeted by Greek real estate agents who drive them straight into the city to view apartments for sale.
The visitors are drawn to Greece by rock-bottom property prices and one of Europe’s most generous “golden visa” schemes, offering a renewable five-year resident’s permit in return for a 250,000 euro ($285,000) investment in real estate.
That’s enough to buy a threebedroom apartment in the capital with a view to the Acropolis hill.
It is also enough to bring the first glimmers of recovery to the market since the Greek economy started to collapse after the debt crisis in 2009, although prices are still down by about 40 per cent from their peak.
One Athens resident, who gave his name only as Vassilis, had almost given up finding a buyer for his home last year when a minivan pulled up outside his maisonette and a Chinese family of four got out. A day later, he got an offer.
“They didn’t see the house again. We went and got a down-payment, and everything was set in motion,” he said.
Vassilis had bought the home in the up-and-coming suburb of Gerakas for 320,000 euros ($367,000) in 2007 and decided to sell in order to buy his two adult children their own apartments. He sold it to the Chinese family for 220,000 euros.
Real estate prices rose 0.8 per cent in the second quarter year-onyear after a 0.1 per cent rise in the first - the first pick-up since 2008, according to Bank of Greece data.
Foreign direct investment in property jumped 91 per cent to 287 million euros last year from 2016, the bank’s data showed. Taxes from property sales rose by an annual 41 per cent in the seven months to July to 204.7 million euros, according to data from state revenue authority AADE.
“We are getting much more phone calls,” said Lefteris Potamianos, head of the Real Estate Association of Athens, which represents about 3,000 brokers.
“The overwhelming majority is foreigners and there are yet some Greeks. Certainly, Chinese are by far ahead of the game.”
Potamianos predicted house prices would rise an average 5-7 per cent annually in the greater Athens area this year and the next.
It helps that the yuan has fallen more than 6 per cent against the dollar this year. Beijing restricts overseas investment but Chinese investors are still finding ways to get money out of the country.
People like Lian Wenmin, 29, a former accountant from Beijing and potential golden-visa investor, say buying in Greece is not just about taking advantage of low prices and getting a visa that allows them to travel freely within the European Union.
Greece’s warm climate is also part of the appeal, Lian says.
“Greece has very nice weather and I like the people, the food,” she told Reuters on the balcony of an apartment she is thinking of buying in an upmarket area overlooking central Athens.
Lian plans to spend 250,000 euros on one or two apartments in central Athens to rent out on a home-sharing site such as Airbnb, and possibly on another property for herself in a southern suburb.
“I can buy like two or three apartments with 250,000 but if I spend the same amount of money in Beijing I can only buy one apartment in a generally nice location of 30 square meters. It’s big difference,” she said.
Tighter restrictions on migration starting last year in the United States, Canada and Australia — popular destinations for Chinese in the past - have also worked in Greece’s favour, said Alice Ma, sales manager at Beijing-based Bloom Consulting.
Portugal’s five-year golden-visa programme has also attracted Chinese interest along with investors from France and Britain, but there buyers need to put in at least 500,000 euros.
Ioannis Anastassiadis’s Anastassiadis Group offers a wide range of services to facilitate Chinese investment, including providing lawyers and notaries to help secure the visa.
“Greece is slowly becoming a place which attracts people to live here and to plan even the rest of their lives in Greece,” he said.
For renters, the Chinese-led interest is not good news, however.
The buy-to-rent mentality of many of the buyers is pushing up rents and sometimes leading to threats of eviction unless renters agree to pay the higher prices, said Angelos Skiadas, head of Greece’s tenants association PASYPE.
Rents across Greece rose by 8.4 per cent in the 12 months to September from a year earlier, according to a survey by the Greek franchise of RE/MAX International.
“Since last year, the problem is becoming a nightmare,” Skiadas said. “tenants are forced to leave because they are being blackmailed by their landlords, while those who look for a new house are faced with extravagant rents.”
He said PASYPE plans to lobby the government to raise the minimum rental period from three to six years.
Of the 3,404 residency permits issued since the golden visa programme started in 2013, almost 1,700 have gone to Chinese nationals, data from investment agency Enterprise Greece showed.
Carrie Law, chief executive of Juwai.com, a Chinese website for global real estate, said inquiries about Greece doubled in the first quarter of 2018 and jumped threefold in the second.
“It is a dramatic growth,” she said.
Meanwhile, volatility in Italian government debt has made it harder for Greece to return to bond markets, Greek Finance Minister Euclid Tsakalotos told Reuters, but said he is comfortable with waiting for the right time to raise funds.
A recent selloff in Italian government debt has pushed up the borrowing costs of other Southern European countries, including Greece.
But Tsakalotos told Reuters on the sidelines of a conference on Friday that his country’s financing needs are under control.
Greece, which exited that last of its bailout programmes in August, has agreed debt relief measures with its euro zone partners. These extend maturities on some loans and soften the interest rate burden on others. Athens also has a 24 billion euro cash buffer, which will help to improve debt sustainability over the medium term.
Tsakalotos said Athens would return to the bond market at the optimal time, and played down the Italian bond selloff.
“It has made it a little harder but on the other hand I think markets are now becoming more sophisticated in understanding that Greece has finished its programme, it has done a huge amount of reforms, it’s got a buffer so that its financing needs are under control for at least 2-1/2 years,” he said.
“Also it has got a debt deal that means financing its debt is easier than it is in Portugal and Italy.”