“Looking, not buying (yet),” could have been the headline of a recent WSJ article on the holiday property market in crisis-stricken but still spectacular Greece, with the closer focus on the Cyclades jets-setters’ isle of Mykonos.
According to writer Art Patnaude, who quotes local real estate agents, bargain hunters have recently scoured the celebrity A-list island but political and economic uncertainty has dried up final sales.
In Greece, estate agents estimate house prices have been cut at least by half since the 2007 peak. Figures from the Bank of Greece show a 40-percent decline since 2007, but given the very small number of transactions in the market, the figures “may understate the degree of actual value declines,” WSJ quotes Andrew Currie, managing director at Fitch Ratings.
Another parameter not quoted in the article is the fact that, often times, the entire purchase amount is not disclosed to tax authorities, and by extension to the BoG and statistical services. A “hand-to-hand” exchange of cash makes only the “office purchase amount” subject to taxes, fees and third-party levies…
Conversely, Bild writes that the economic downturn and continuing turmoil has piqued the interest of ‘deep-pocketed’ Russians in Greek real estate. Bild refers to a doubling of real estate purchases, but without giving an absolute figure. Nevertheless, the German tabloid puts the implosion of prices in the country at roughly 50 percent from its peak years — which, empirically, appears realistic.