How safe is the Greek Real Estate Market today?
The credit crunch that has affected developed countries such as the United Kingdom, the United States and Spain has put a damper on the real estate markets all over the world.
The Greek real estate market is not exempted from the speculation that it may be just as unstable as the real estate markets elsewhere across the globe.
However, there are indicators that show that the Greek real estate market is as safe and stable as they go. In fact, these indicators tell us that this is actually the best time to buy real estate in Greece. You can read these indicators below.
Floundering real estate markets all over the world share one characteristic: The people who pose losses in it are the ones who buy property in order to sell them for profit a year or so later. Naturally, given the conditions of real estate markets today, one cannot expect to turn in a profit from buying and selling homes today.
However, this is not true in the Greek real estate market. Greek buyers are more into buying homes with long-term investments in mind. They are either making the purchase so that they would have a retirement home in the future, or so that they would have something for their children to inherit. In the meantime, they rent out these homes to holiday-goers for added income. This trend in the Greek real estate market lends a semblance of stability into it.
Low Interest Rates on Housing Loans
Another characteristic possessed by many failing real estate markets in the world is the fact that the interest on housing loans are at an all-time high. Debtors could no longer afford to pay the mortgage on their homes and are, therefore, forced to let banks foreclose their properties. Banks, on the other hand, are saddled with foreclosed homes that they could not sell.
The Greeks, however, are aware of the rising interests on housing loans. Many of them do not avail of these loans as they buy real estate even though they are eligible for them. Banks in Greece are also being enjoined to lower their interest rates on housing loans by the end of 2009.
Real Estate Stability
Despite negative reportage, the Greek real estate market is actually quite stable. Whilst it is true that there are many construction and development companies as well as individuals that are selling their holdings in a frantic manner, to the point that they are willing to negotiate discounts and deductions just to get rid of them, this is more like the exemption rather than the rule.
There have been fluctuations in prices in Greek real estate, but these fluctuations are not as extreme as those experienced in other real estate markets. In 2009, there is a very low likelihood that prices will increase or decrease for real estate in Greece. Moreover, the demand for real estate in Greece remains high and banks remain discerning in screening people who are eligible for housing loans.
The real estate market in Greece remains healthy despite the financial crisis that has crippled major economies in the world. The prospects are also positive, and as thus, it is as good a time to buy real estate in Crete and Greece right now as ever.
Article by Andreas Batakis of Talos Properties in Chania