Foreign investors, tourism fuel a Greek revival

Athens

LESS than a year after Greece emerged from a multibillion-euro international bailout, Athens is witnessing an investor boom.

Hip new hotels with Acropolis views are dotting the skyline. Construction workers are tearing into dwellings owned by Greeks needing cash and converting them swiftly to short-term rentals, Airbnbs or fancy new homes for foreigners.

Thousands of visa-seekers, a significant portion of them Chinese investors looking for bargain real estate, are coming to this capital city as well as the islands of Santorini and Corfu in search of homes that will give them a European base.

Local homeowners, pressed by Greece's lengthy financial crisis, are trying to take advantage of the investor bonanza, selling apartments or renting their homes to tourists in a frenzy that is quickly changing the housing market.

The newcomers are chasing Greece's so-called golden visas, which other crisis-hit countries like Portugal and Spain have used for years to lure investors in a bid to stoke an economic recovery.

Spending a minimum of 250,000 euros (S$382,500) on a home in Greece secures a five-year renewable visa.

Greece is a latecomer to the global buying trend - in part because its debt crisis was so dire in 2011 - but it has become a hot destination for those with enough money. The government began offering golden visas in 2013, also drawing investors from Russia, Turkey and the Middle East.

However the turnaround is coming at a cost. While rising property prices benefit homeowners, renters are being priced out. Families still struggling to recover from the crisis are being pushed from working-class neighbourhoods as the wrecking companies move in.

"It's like what happened in Barcelona, where everyone was forced from the centre," said Maria Dolores, a young artist who lived there before moving to Athens four years ago. She and three roommates were evicted from a 400-euro-a-month rental in Athens in November as the landlord weighed converting it to an Airbnb or selling to a foreigner.

Carrie Law, chief executive of Juwai.com, a Hong Kong-based real estate investment group, said the country that once was an economic basket case has become a top destination for China's middle class because of the golden visa programme.

Chinese feel comfortable going to Greece because big Chinese state-owned companies, including Cosco, which owns most of Greece's Piraeus port, have already invested, she said.

Property prices in Greece are recovering from a 40 per cent plunge that began in 2010. Greece nearly crashed out of the eurozone in 2015, but stability has slowly returned, reviving confidence and tourism, which boomed with a record 33 million visitors last year.

Big investors, including Thomas Cook and Wyndham Hotels, are pouring billions into the tourism sector, and dozens of hotel and resort projects are opening or underway, according to Enterprise Greece, the government agency promoting investment and trade. "We are seeing renewed investor confidence in Greece," said Grigoris Stergioulis, the agency head.

Investors have tried to cash in partly by converting properties to lucrative short-term tourist rentals, which have quadrupled in five years, reducing the supply of affordable rental housing for average Greeks.

Argiro Fouraci, 29, recently began renting five apartments that have been in her family for years. A teacher who lost her job during the crisis, she had struggled to get by until offering the apartments, in the popular Koukaki neighbourhood near the Acropolis, as Airbnbs.

She said she now clears about 400 euros per month on each apartment, after taxes and management fees. The earnings help her care for her parents, who are in their 60s and whose pensions were slashed. They, in turn, support her brother, who has opened a vaping store. "Most of my friends are still unemployed," she said. "Now I can have a life and help my family."

Such business has lifted fortunes for Stavros Siempos, 53, owner of Pantopolion, a grocery in Koukaki that sells feta cheese, olives and other traditional Greek products. The rise of Airbnb rentals has driven many Greeks from the neighbourhood, he acknowledged.

"We don't have Greek neighbours anymore; we have Airbnb neighbours," he said. But it is good for business, he added. "We're better off now, because tourists have money."

As Airbnb makes inroads into the country's real estate, Greece's golden visa programme has opened its housing market - and reshaped its pricing structure. A scan of property listings shows that many mid-sized apartments in Athens and Thessaloniki and on Greek islands are priced at exactly 250,000 euros, the minimum needed for buyers to qualify for the visa programme.

The programme has drawn about 10,000 investors from China, Russia and other non-European Union countries, channelling around 1.5 billion euros into Greek real estate in the past five years, according to Enterprise Greece. Chinese investors account for more than 40 per cent of visa buyers.

Activists have warned that, when combined with the proliferation of Airbnb, a housing crisis is threatening entire communities.

Dolores, the artist who had to find a new home, said "aside from people and families, collective spaces and neighbourhood networks are also getting displaced and vanishing from the map." NYTIMES