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Victoria Mindova

Yannis Revitis has been in the real estate business in Greece for the last twenty years. His company has five offices across the country involved in consultation, sale and assessments of real estate property. The successful businessman agreed to explain the readers of GRReporter situation with real estate in Greece and to what extent has the economic crisis affected this sector.

According to data provided by the Bank of Greece real estate property market in Greece is experiencing a decline in Greece since the beginning of 2009. As a result of what did this happen?

It all started in the black October of 2008 when some banks in the U.S.A. with increased investment in real estate marked the beginning of the crisis. This crisis has grown all the way to Europe, and Greece respectively. As a result of the poor economic policy in recent years and increased credits which we accumulated as a result of this policy, created the Greek crisis. All economic sectors were affected, including the real estate market.

When the American crisis began to close down a series of banks for failure to perform their commitments to the so-called "toxic bonds, their European and Greek colleagues, also gow worried. This reduced the market liquidity, which immediately affected the commerce on the property market.

 
How did the crisis change the everyday work of the real estate agencies?

Those agencies which have been for many years on the market, which have created their reputation and have a clienteleof their own felt the crisis a lot less than the new market entrants. Companies that have entered the market in the last 5-6 years due the progress in their business in this period felt the crisis much stronger. Some did not survive the impact and closed down their businesses, others are expected to close down the business in the coming year. Older agencies have survived through other crises as well have the opportunity and experience to hold things until the crisis passes.

 
Nobody can say how it will today's economic crisis develop. We can not predict what the consequences will be or how long the recession will last nor which sectors will be able to save themselves and which will suffer most. The truth is that in the long run anyone who has invested in real estate at a logical price has not lost.

The ones who lost after the height of the crisis are the people who acquired the property on credit and now struggle to pay it. All the people who were able to buy property without a bank loan or at lower prices would profit in the long term. Of course, the crisis also provides a new opportunity to those who can benefit from it - to acquire property at lower prices.

According to your observations, where was the first place the crisis hit the real estate business? Small or large properties were hit first?

Crisis always hits the entire market, no one remains fully intact, but the greatest difference was observed in expensive properties. Those who are most difficult to sell and least demanded.

With the advent of the crisis did the prices drop or did market freeze, why?

The assessment for the entire past year 2009 is that on average the prices in the country fell by about 12%. We expect this year as well to finish with a decline of about 8%. So from the beginning of the crisis in October 2008 to October 2010 a decrease in the average real estate prices in Greece will be registered of around 20%. Certainly prices did not collapse as in the U.S. or in some other European countries. Prices dropped because of those who turned out to be with large loans and wanted a quick sale, as well as by those who have many properties and want to sell. In Greece, however, a massive wave of depreciation of real estate was not formed.

The building contractors also did not undertake price reductions. Part of the reasons are that they had a good profit from previous years, allowing them to wait. Another reason is that the prices of the land and construction materials were increased, prompting the building contractors to refrain from large price differences for sale after the beginning of the crisis. Therefore, even the prices of the construction did not drop by more than ten or fifteen per cent for new construction.

What advice would you give to someone who would like to buy real estate property today?

My advice is to wait for some time, but also make a very good market research. Unfortunately, today it is very difficult to make predictions on where prices will go. It is certain that from now on those who sell property will offer it at much more reasonable prices in comparison with those of last year and the year before that. Buyer must have in mind to what extent the property he buys can be resold or in other words, is it worth the money. A good urban property can easily be sold when it has a good exposure and it is in good condition, to have easy access to public transport and possibly to have some green plants in the neighborhood in which it is located. This is an investment that would bring a good return to the owner.