Greece

by Konstantinos Klisiaris

kostas.klisiaris at eko-consulting.gr

Greece, situated at the crossroads of three continents in the southern part of the Balkan peninsula in the Eastern Mediterranean. It has been characterised by many as the “Land of Heaven” with the production of many agricultural products anw the combination of mountains and sea in a breath’s distance. The endless crystal water beaches and the fact that sun is visiting the Country and stays more than 9 months in a year conttributes significantly to be one of the hot spots for the rich and famous ando not only.

Greece has a total area in excess of 130,000 square kilometers and consists of mainland and islands, which occupy approximately 20 per cent of the total area and contribute to Greece’s severely indented coastline of over 15,000 kilometres. Greece borders on the north with Albania, the former Yugoslav Republic of Macedonia, Bulgaria and on the north east with Turkey. It is Europe’s closest link to the Middle East. With the European Union operating as a single market, Greece is ideally situated as an entry port to the EU from the Middle East, North Africa and most of the north-east Balkan countries. Greece is surrounded on three sides by sea: the Aegean in the east, the Ionian in the west and the sea of Crete in the south. The Country has many ports and with the prerefered very good geographical location and transportation infastructure, the accesibility of services and products do not face any problem.

Prima facie evidence would suggest that the recorded history of Greece covers a period in excess of 3,000 years. Many early relics of Greek civilisation are to be found in the various museums in Athens and Thessaloniki, although there have been a number of findings going back some 5,000 years to the Iron and Stone Ages.

The Demographics of Greece is about the population that has inhabited the Greek peninsula, a region where the Greek language has been continuously spoken for over 3500 years. The 2001 census of Greece reported a population of 10,964,020 people. The population exchanges with Bulgaria and Turkey that took place in the early 20th century, added in total some 2 million Greeks from Asia Minor, Constantinople, Bulgaria, Albania and Yugoslavia to the demography of the Greek Kingdom.
Some Stats:

• Private consumption:2010 prediction, 150 billions Euros
• Government consumption: 2010 prediction, 35 billions Euros
• Population growth rate: 0.19% (2005 est.)
• Birth rate: 9.72 births/1,000 population (2005 est.)
• Death rate: 10.15 deaths/1,000 population (2005 est.)
• Net migration rate: 2.34 migrant(s)/1,000 population (2005 est.)

Sex ratio:

• at birth: 1.06 male(s)/female
• under 15 years: 1.06 male(s)/female
• 15-64 years: 1 male(s)/female
• 65 years and over: 0.79 male(s)/female
• total population: 0.96 male(s)/female (2005 est.)
• Infant mortality rate: 5.53 deaths/1,000 live births (2005 est.)

Religion

Eastern Orthodox Christianity is the official and dominant religion in Greece. During the centuries of Ottoman domination, the Greek Orthodox Church preserved Greek language, values, and national identity and was an important rallying point in the struggle for independence. There is a Muslim minority concentrated in Thrace, the majority of which has a Turkish ethnic identity. There are also a number of Jews in Greece, most of whom live in Thessaloniki.

Literacy:
definition: age 15 and over can read and write
total population: 97.5%
male: 98.6%
female: 96.5% (2003 est.)

Education

Greek education is free and compulsory for children between the ages of 5 and 15. English language study is compulsory from 5th grade through high school. University education, including books, is also free, contingent upon the student’s ability to meet stiff entrance requirements. A high percentage of the student population seeks higher education. More than 100,000 students are registered at Greek universities, and 15% of the population currently holds a university degree. Entrance to a university is determined by state-administered exams, the candidate’s grade-point average from high school, and his/her priority choices of major. About one in four candidates gains admission to Greek universities. The Greek law does not currently offer official recognition to the graduates of private universities that operate in Greece. As a result, a large and growing number of students are pursuing higher education abroad. The Greek Government decides through an evaluation procedure whether to recognize degrees from specific foreign universities as qualification for public sector hiring. Other students attend private, post-secondary educational institutions in Greece that are not recognized by the Greek Government.The number of Greek students studying at European institutions is increasing along with EU support for educational exchange. In addition, nearly 5,000 Greeks are studying in the United States, about half of whom are in graduate school. Greek per capita student representation in the U.S. is the highest of any European country. Pasok, the potical party which belongs to the socialism, won the national elections that took place before a month.

National Finance

Greece has a high ratio of national debt around 10% as a percentage of the National GDP.
Governmental influence on the private sector is not strong and most of the policies are towards the route of privatisations. there no significant trade restrictions when the business is following the European and the International trade Agreements and Norms. Most of the Greek Banks ask an analytical record of a deposit of more than 15,000-20000 euros in each money trasfer.
The average salary of an unexperienced or an uneducated is around 750 euros/per month but with almost 10.5% unemployment rate at the moment this salary seems to be a salary for University degree holders too (especially for those with a little or no experience. The Government yearly announces the Salary increases and so far are strongly inter-related and are close to the inflation rate or plus 1-2% above this rate in the optimistic scenarios.  Tax on business is quite high around 25-40% on revenues annually and on salary incomes around 15-37% annually.
Trade restrictions levels are low as long as all business plans are following the European and International Trade Agreements and Norms.

Banks in Greece, usually asks an analutical records and further information of deposits and transactions of 15,000-20,000 Euros for avoiding money laundering cases.

Greek Stock Exchange has attracted the biggest names in the Global business investor era and many famous investment vehicles have a strong presence in the Greek business market. Steady domestic economic growth and significant inward investment are helping Greece battle the headwinds of a tough global economy.

Buoyed by several booming industries, economic growth rates above the European Union average, strong investment and exports, and its proximity to emerging and rapidly growing economies in southeast Europe, Greece provides investors and businesses with tremendous opportunities. However, the nation of 11 million people is not without significant economic and financial risks, including high unemployment, high budget and current account deficits, and the need for bureaucratic, pension and tax reform.

Growth weakened in 2008 under the weight of the global economic crisis, despite a sound financial
sector and sustained domestic demand. Activity is expected to contract in 2009 on the back of
weakening exports, and to recover only slowly in 2010 as the external environment improves.
Unemployment is set to reach double digits by 2010 and inflation will be low but persistently above
the euro area average.

Public finances are set to worsen further this year, despite consolidation efforts by the government,
as the recession hits activity. The high public debt and continuous fiscal slippages limit the room for
discretionary fiscal stimulus. A strong commitment to enhance fiscal viability is imperative to restore
market confidence and bring sovereign interest rate spreads to their pre–crisis levels. Sustained
consolidation hinges upon strict control of spending, broadening of tax bases and curbing tax evasion.
Additional reforms in the pension and health care systems are also essential.

Some Stats:

• Unemployment rate: 10.3%
• Total domestic demand 215.3
• Exports of goods and services 43.5
• Imports of goods and services 61.1
• GDP at market prices 197.6 in billion of Euros
• General government financial balance (as a percentage of Gross Domestic Product):-6.7%
• Current account balance (on settlement basis as a percentage of GDP):13,4% Transportation links are almost everywhere in Greece. The services can be characterised as outstanding.
• There have been significant improvements to the National Medical Services in the last decade. Universities are well branded in the market and are offering superior level of services.
• Almost everybody has one or two mobile phones and this is not decreasing in the age group of 64-80 years old.
• Internet users are rapidly increasing with 20% to be everyday users. When we look at the ages of 14-35 years old this rate is climbing up to the 80-90%.
• Sales transactions over the Internet are in not in high rated due to the fact that most of the users are not feeling secure to “announce” their credit cards details. Foreigners can purchase property in Greece. Recent changes in Greek law now permit foreign ownership of property in previously sensitive areas such as Crete and Corfu. Generally, as previously stated, there are no restrictions on non-residents acquiring real estate in Greece even in the border areas. However, both EU and non EU residents must obtain permission from the appropriate authorities before purchasing real estate in border areas. Once you have purchased your property, you become the freehold owner in perpetuity.

Getting Involved with the Purchasing Procedures

The first stage in the conveyancing is to sign a Sales Agreement and pay a deposit – usually 10 per cent. This agreement contains the names of the parties, a description of the property, the price, the method of payment and any special conditions negotiable in the purchase process.
The vendor will then be instructed to take the property off the market whilst your appointed lawyer completes the purchase transaction. Under Greek law, no contract is enforceable unless it is in writing, It is important therefore that once an offer has been made and accepted all purchase documents are checked by a lawyer before signing to ensure that the vendor has rightful title to the property.
Losing your deposit

If you do not go ahead with buying the property after you have paid your deposit, you will forfeit it and face potential legal action from the vendor. However, if the vendor pulls out of the deal after receiving your deposit, you are entitled to claim a return of double the deposit in compensation. The compensation will not affect your statutory rights to legal action against the vendor for breach of contract.

Finding the Experts

You will undoubtedly need a good team. You will need a:

• • bi-lingual agent
• • notary public
• • lawyer
• • banker.

Liaising with an agent

The agent will normally barter the purchase consideration on your behalf. If you choose to attend this ritual, be prepared for a long duration as the relevant merits of the family, the property, the village/town, etc. are proudly promoted by the seller. When the shenanigans are finally over, and a price is agreed upon, the “ouzo and mezedhes” (these are traditional drinks and food for a kind of celebration, which is a small sign of the famous Greek hospitality) will appear and suddenly everyone will be part of one large happy family, with promises of much merriment and rejoicing. The agent, in coordinating the purchase process, is also likely to establish via the lawyer who the owners are of the adjoining properties. The boundaries are then fixed by topographical survey. Such a survey carried out by an expert could cost in the region of €150.

Appointing a notary public

Your first experience of this official will be the visit together with your agent to sign your Sale Agreement using the Greek bible as the swearing oath. The notary public works with your lawyer to ensure that the contracts are drawn up in an orderly fashion and presented to the taxation authorities on time. Before any transaction takes place, your lawyer will carry out searches with the Land Registry. The notary public will not proceed with a contract concerning a property which does not have a clean title, free of mortgage obligations, etc. You will normally be expected to pay a fee of up to 1.6 per cent of the ‘notional value’ of the property as recorded in the Contract of Sale.

Finding a lawyer

A good, English speaking, well-qualified conveyance solicitor is absolutely essential. The lawyer will draw up the Contract of Sale on your behalf, in Greek, arrange the signing ceremony with the vendors, normally at the office of the local notary public, and also negotiate the purchase tax with the local taxation office. You should allow 1-1.5 per cent of the purchase price for this service.

Getting a banker

The vendor will probably require payment in euros. You will have opened a euro account in preparation at either a private or national bank. Normally, your bank will arrange to pay the vendor a ten per cent deposit at point of signing contracts and allow a further 15-20 days for the remaining consideration to be settled, although the settlement period can vary per transaction. Your choice of banker will depend on day to day considerations such as location, connection with international banks, opening hours, etc.

All titles are in the Land Registry Offices and most of the disputes and arbitrations are between the Greek Church and the Government for past unsolved settlements. There is a recent dispute between these two parties because the Greek Church do not want to pay property taxes.
Land use regulation are clear and most of the problems and issues arise in cases of land with forest inside or land with illegal buildings in it. In these two paradigms the law is strict but simultaneously, a potential property investor must know that the corruption of the public services is still high.
Construction rates has been decreased significantly in the last 5 years, mainly, due to the unexpected increase in the building permission licenses and the low house demand levels.
Most of the house are not under an insurance contract but things seems to be changed in the last decade and many people are more willing to pay a property insurance.

There are many broker agents but a small percentage can be characterized as professionals with in depth in knowledge.
Some of the international property consulting firms have also opened representative offices in Greece, most of them under the franchising system and rules.
Royal Institutes and American Appraisal Institute has a low profile presence in the last years.

The Greek property market can be characterized as stable at the moment, but truly speaking, there are always the “Traditional Investors and Buyers”, those that are strongly believing that Greece, with Acropolis and Parthenon, with the most beautiful and idyllic islands for a majority of people, has something unique. In other words, lots of investors are looking for a house or a piece of land in a Greek island or across the endless coastlines. The drop in the house demand levels,especially in the big cities, are inter-related with the adoption of strict bank loans policies and as a result, fewer property buyers have the money to invest, or to buy a house.
In the commercial property market, vacancies rates are high, 30-40% of the new buildings are not under a lease at the moment. Most of the home buyers are looking for second hand homes to buy or they tend to agree to buy a new house with at least 20 square meters (one room less then) smaller than in the past. Now,the average home for a Greek family is 80-90 sq.m when before 5-8 years was 100-110 sq.m. The strong financial asset for most of the Greek families is the home ownership rate which is around 85%.

Anallyticaly,a property investor can expect annual property yields such as the below:
houses: 2.6-4%
The small houses (30-45 sq.m.) has 7-9% yield annually.
offices:6%
stores:6-7%
warehouses and industrial buildings: 8%

Greeks are very friendly and welcomers of anyone that wants to invest or to open a business in their country. The main problem is still the bureaucracy but in the last years seems to has been weakened.There is little or no significant events of discrimination against races and immigrant groups and most of the times these incidents have been appeared after demostrations and strikes. The populatity of the Greeks are Christians and a minor part, around 2-3% are Muslims. They live together, half a century so far, without any problems. Greece is the right place to invest your money and have your property spot.