“Greece is currently very cheap and if you look at the statistics, buying a property today in Greece is like buying at year-2000 prices,” Luis Limgenco, a real estate investor considering opportunities in the Mediterranean country, told CREW
“However, unlike what we saw in Las Vegas when we invested in Q1 January 2012, we still see significant downside regardless of the outcome of the referendum and whether Greece will continue to be accepted to stay with the Euro.”
His comments follow the latest stats from the Global Property Guide, which registered a -0.57 per cent decline in Greek house prices year-over-year. Overall, prices have declined steadily since 2009.
The current situation has many likening the climate in Greece to a ‘Lehman’ moment, when the U.S. banks crashed in 2008; however, with the debt solely on the backs of European governments, the outcome is still uncertain.
This weekend, a national referendum will decide the fate of the country’s economy as the vote will determine whether to accept a new bailout package from international creditors. The country’s PM is in the hot seat, lobbying for Greeks to reject the aid package, which would effectively boot them out of the Eurozone.
Being booted out of the EU could force the re-adoption of the Drachma, which would be worth a fraction of the Euro. As a result that could set Greece up as a cheap travel destination and further open opportunities for owners of vacation properties, especially those in the Greek isles.
Experts close to the situation believe that one key to how the referendum vote will turn out is the week-long bank shutdown and limits on withdrawals, and whether anger among voters gets directed at Europe or the Greek government for walking out of talks.
The impact of Sunday’s vote could sway investors to break into a market that could pay huge dividends for investors with one of the world’s hottest tourism markets.
But Limgenco is preaching caution based on research and analysis he’s been doing over the last several months.
“The leading European investment banks are all suggesting that there are recession risks for Greece down the road,” Limgenco said. “Therefore, prices should continue to decline and we will continue to wait and monitor closely.”
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Investors are taking a wait and-see-approach when it comes to investing in Greek real estate, which has nosedived as the country’s economy is in tatters, with some see more downside than upside at this time.