Warm sea, pleasant climate – what else is needed for a peaceful old age?
According to the Greek press, the average cost per square meter of residential property in the country ranges from €1,500 to €2,000. However, if you open the list of offers from the numerous firms selling Greek real estate, you will get the impression that a "square meter" in Greece costs an average of €8,400. This paradox is explained by the fact that agencies advertise the most expensive properties in hopes of wealthy buyers. But our interests are more modest – exchanging our property in Belgorod for a small villa in warm Greece, so let's see what the Greek market actually offers.
Athens is a bit expensive for Greeks
Let's start with the city "named after the goddess of war and wisdom" – Athens. You may be surprised, but housing in the center of the Greek capital is significantly cheaper than in the suburbs. The fact is that most Athenians tend to move out of the city, and the center is considered unsuitable for living from an ecological point of view. Few people know, but Athens sometimes experiences smog when fog mixes with exhaust gases.
The most expensive street in Athens is considered Ermou, but the secret of its high cost is the high rental rates for commercial spaces (€3,600 per square meter per year). The average price of a two-bedroom apartment in central Athens ranges from €110,000 to €180,000, and the typical price per square meter is about €1,800. So, for example, a two-bedroom apartment in the Athens district of Ilion with an area of 83 m2 on the secondary market costs €136,000 – €1,640 per square meter. A new building will cost more: for a 55-square-meter apartment they ask €154,000 – €2,800 per square meter.
If we go out to the suburbs, we won't find apartments at all, only individual houses. The average price of a house on the outskirts of Athens is half a million euros. But a square meter costs a maximum of €2,000, provided, of course, that the house is not located right at the water's edge.
Look for Halkidiki in Macedonia
But €2,000 is expensive for Greece. Therefore, many advise buying houses in Macedonia (not to be confused with the independent country that emerged after the collapse of Yugoslavia). This is the name of a historical region in northern Greece, comprising 25.9% of the territory of the modern Greek state. The administrative center of Macedonia is the second largest city – Thessaloniki. In its vicinity there are many small settlements that are full of tourists in summer and live ordinary village life in winter.
As told by the owner of the agency "Real Estate of Thessaloniki" Dimitros Eleftheriadi, one of the cheapest and at the same time perhaps the most promising place in all of Greek Macedonia is Halkidiki (not to be confused with the city of Chalkida on the island of Evia). It consists of three peninsulas – Kassandra, Sithonia, and Agion Oros, collectively resembling the trident of the sea lord Poseidon cutting through the Aegean Sea. A one-bedroom apartment in a town on the Kassandra peninsula with an area of 60 m2 costs €69,000 – €1,150 per m2. And this is 350 meters from the sea. Exactly the same apartment, but 30 meters from the sea, already costs €100,000. Houses and villas, of course, are sold much more expensively – from €235,000 to €4 million.
For those who do not want to limit themselves to a cramped apartment, our experts advise buying a plot of land and building whatever they like on it, taking into account what the local authorities will allow. Here everything depends not only on the distance to the sea, but also on the access from it.
Most coastal zones are separated from the shoreline by a 30-meter strip of state land. The price of land on such plots in Halkidiki is quite stable and amounts to €7,500-7,800 per 100 square meters, but if it directly includes a piece of shoreline, then 100 square meters will cost about €25,000. Land on the islands is much cheaper. For example, land in a forest-land property of 3,300 m2 on the island of Evia, which, by the way, is connected to the mainland by two bridges, costs only €333 per 100 square meters, but since there are 33 thousand of those 100-square-meter units, the plot itself goes for €11 million.
So an island is a very profitable acquisition. Today there are two for sale: one, 3.95 hectares, for €1.72 million; the other, 1012 hectares, for €5.5 million. Given that Greece is 20% islands, something else will periodically be put up for sale.
A hotel is no more expensive than a villa
Investments in Greek real estate at the current rate of price growth (last year it increased by only 5%) will not pay off soon. But this slowness gives an opportunity to seriously engage in business (for example, hotel business) and buy a hotel.
It costs no more than a good villa or a remote islet. So, the cheapest hotel on the Sithonia peninsula is sold for €900,000. The hotel has 17 rooms and is located 70 meters from the shoreline. The most expensive of the hotels offered for sale (with 138 rooms) on the same peninsula is offered for €13.1 million. Moreover, when buying the most expensive hotel, a square meter will cost $600, and the cheapest – $900.
Fortunes are made in a season
In high season, by renting out a villa to vacationers, owners earn from €139 to €465 per day. If you set a goal, you can recoup the cost of the house in about six years. Professional management companies have been operating in Greece for a long time, which take care of all the worries of renting out housing, maintain the house in decent condition, etc.
As for urban real estate, rental prices in Athens are approximately as follows: a two-bedroom apartment with an area of 78 m2 9 km from the center of Athens can be rented for €1,830 per month. In the very center of the city, one-bedroom apartments are rented for €79 per day, €550 per week, and €2,365 per month.
Many Europeans "cover" their mortgage payments with rental income. So you can become a happy owner of a house in Greece without having the full amount on hand, only enough to get a mortgage loan. The scheme is roughly this: get a loan, buy an apartment or house, and rent it out. In about 15 years, or maybe earlier, you will pay off the bank and become the full owner of your seaside home.
And although by law not only a Greek but also any foreigner in Greece can get a mortgage loan, in reality not everything is so smooth. As our experts explained, banks are very reluctant to give loans to non-EU citizens, and clerks actively look for reasons to refuse.
As for the specific conditions, in Greece the mortgage rate ranges from 3-6% per annum, the maximum loan amount can reach up to 100% of the market price of the property. Money is lent for a term of 5 to 30 years.
Taxes are levied on buyers
Indeed, in Greece there is a property acquisition tax, and the buyer also pays a 1% state duty. As explained by Kostas Mavrodis, head of the Mavrodis agency, a 9% rate applies to amounts up to €15 thousand, and 11% on amounts exceeding that. In Greece, there is a concept of cadastral value of property, which is half the market value. The tax is calculated based on that.
If the cadastral value of the property is less than €243.6 thousand, this tax is not paid at all. For married couples, the tax-free amount doubles to €487.2 thousand. For each of the first two children, this threshold increases by €61.65 thousand, and for the third and subsequent children by €73.4 thousand. In Greece, property owners are not taxed, except for landlords – that is, those who rent out property.
Note that the peak of price growth for Greek real estate is already behind us. It occurred in the years preceding the 2004 Athens Olympics, and after that, increases in various periods ranged from 5 to 10%. Rental rates have grown roughly the same. But the calm and reliable situation should suit current investors. Greek real estate always holds its value.