46 | GREECE & UKRAINE Letter from Greece
The news from Greece is unexpectedly cheerful, especially in Rhodes where Savvas Savvaidis is based. How have they weathered such a storm?
returning to the country, large amounts of cash deposits are back in the banks, structural reforms are being actively implemented and, according to the IMF, the country will reach a true primary balance by the end of this year; a remarkable achievement with no other precedent in the world’s economic history. The cost has been high. The austerity measures had a
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signifi cant impact, creating an accumulated contraction of 25% of the country’s GDP since 2008 and unemployment levels of 25%. As a result, the Greek real estate market has suffered. Since the start of the crisis transactions are down by 60% and prices have reduced by 10-40% from the peak. However, not all areas in the country have faced the property recession in the same way. Areas with extrovert economies such as the popular Greek islands have seen the effects of the crisis in a far less dramatic way than that of the Greek mainland.
his past year has been
surprisingly positive for Greece. Foreign investors are now
Rhodes is one of them. In effect, Rhodes’ property market has shown a remarkable resilience. Surprisingly, sales in 2012 have been up by 20% in relation to 2011! Whilst classic second home destinations in the Mediterranean, such as Southern Spain and Cyprus, have experienced a steep decline in their property markets, Rhodes has
“Areas such as the popular Greek islands have seen less dramatic effects of the crisis”
weathered the storm very well. For people that know the local economy this came as no surprise. Here are some reasons that Rhodes remains popular:
Limited Supply: The stock of houses for sale on the island has always stayed at regular levels. Unlike Spain and Cyprus, where local and international developers have created a massive building industry, Rhodes’
development of second homes has grown on a limited scale. Second homes have been built by small and medium size family run companies in small groups.
It is worth mentioning that throughout the island between 2001- 2009 there have been only four development projects, with no more than 25 houses each!
All time classic: The beauty of the island, its rich heritage, the healthy climate and the authentic Greek lifestyle have been, and will continue to stimulate the demand for a home in Rhodes. The internet revolution, the mobile communications, satellite televisions and cheaper fl ights are making it easier to relocate without feeling isolated. Rhodes’ land registry together with the island’s strict building regulations are a guarantee for an easy and safe purchase procedure.
Value for Money: Rhodes’ prices are great value for money compared to the rest of the Mediterranean; as of January 2013 the average price, for a
Savvas Savvaidis is the Managing Director of Savvaidis & Associates, based in Rhodes. They specialise in the brokerage of second homes on the island. Email:
savvas@savvaidis.gr Telephone: +30-22410-7100 Website:
www.savvaidis.com
three bedroom property with a pool in Mallorca is €400,000 while at the same time it is circa €300,000 in Rhodes. As Greece is now on the road to economic recovery and the country’s tourism destinations are more popular than ever, the appetite for a second home on the island of the sun continues to grow. After all, this is the best buyer’s market in decades and prospective buyers know this all too well!
LETTER FROM
www.opp-connect.com | APRIL 2013
Letter from Ukraine The housing market in Ukraine is declining and things are difficult for people
predictions realtors have been making for the last six months, prices for all real estate segments, including rentals and sales, are either holding fl at or are declining.
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in the property industry. But is there cause for optimism? tight with lending, typically lending only to large commercial projects which they can take over in cases of default; or to high net worth individuals that can collateralize their loans.
verall, things in Ukraine on the real estate front remain diffi cult. Despite the rosy
Proof of the above comes in the form that the number of completed deals on the market for February 2013 was lower than the previous year. Furthermore, February activity was lower than the previous month, showing a clear decline trajectory.
The primary reasons for weakness in the market stay the same: the overall low level of local salaries combined with overall high cost of housing, particularly new construction. The ratio between average salary and average price per square meter remains one of the highest in the world, making it impossible for the middle class to obtain their desired housing without heavily relying on credit products. Unfortunately, the situation with credit products (i.e. mortgages) is not any better; the banks remain extremely
Even if mortgage products were available to the middle class, the double digit interest rates – and lack of government housing programmes to reduce those rates – keeps the monthly
“The ratio between average salary and average price remains one of the highest in the world”
payments out of affordability of most. Things on the rental front are not looking any brighter, as the market is fi lled with rental offers making it clearly a buyer’s market. We know of individual cases where we have successfully rented 250-square metre luxury apartments for roughly half the rate of what it brought in three years ago. It stood vacant on the market for over three months waiting for a
tenant.
There are some causes for optimism, as the predictions that the local currency will deeply depreciate against USD or Euro have not materialized. Additionally, IMF (International Monetary Fund) appears to approve Ukraine’s latest government actions and will provide that latest lending tranche which will assure the banking system of Ukraine remains healthy. Also, new rules regarding the registration of newly purchased properties have been deployed in effect on January 1st, 2013 – greatly simplifying the process. While we are still learning the implications of this on property prices, we do expect that reduced bureaucracy will attract more buyers and increase inventory turnover (sales by speculators, etc).
An additional factor that has not yet been mentioned (and that, again, is cause for some optimism) is the latest talk about simplifying the work visa process.
As some may know, Ukraine has one of the most complex rules when
Arnold Shterental is a real estate expert and consultant based out of Kiev, Ukraine. He specializes in sales, rentals and consultation for Western based clients. Email:
Arnold@uarealtygroup.com Telephone: +38-093-520-0730 Website:
www.kievapts.com www.uarealtygroup.com
it comes to business visa registration, keeping many top managers (mainly Westerners) that are interested in working in Ukraine at bay.
If this in fact materializes, we expect a higher infl ux of foreign works, which tend to either rent or buy high end real estate, much of which is targeted towards this specifi c segment. We at UA Realty Group will continue to monitor the situation and provide updates.
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