A friendlier investment environment supported by fast-track procedures on the back of increasing tourism flows driving up the need for accommodation options appear to be reviving Greece’s real estate market and spurring its construction industry, according to Bank of Greece (BoG) Deputy Governor Theodore Mitrakos.
Speaking at the 14th Red Business Forum titled “Making Real Estate Great Again”, Mitrakos referred to the key factors set to resuscitate the property market into growth.
Stronger tourism traffic to Greece is seen as a key factor thanks in large part to the soaring demand for accommodation facilities whether hotels or Airbnb-style options. Demand for office space is also on the rise as all the more entrepreneurs are setting up tourism-related businesses.
According to Mitrakos, accommodation units accounted for 21.7 percent of all new investments made by Real Estate Investment Companies (REICs) in 2018 on the back of a double-digit rise in the 2018 index of business expectations for tourism enterprises, which remained positive in January 2019.
Backing his estimates for property market growth in 2019, Mitrakos also referred to the soaring trend of investments in short-term accommodation facilities combined with Greece’s generous investor visa program which have propelled property market growth while introducing new tourism products and re-defining urban settings.
Mitrakos went on to note that over the past three years, foreign investment in real estate has picked up pace with the annual growth rate of net capital inflow at 172.1 percent in 2018, compared with 86.5 percent in 2017, and 45.3 percent in 2016.
The investments, Mitrakos underlined, are mostly in hotel facilities across Greece, thanks to exceptional tourism figures and the market’s response to a growing demand for medium and high class accommodation. Citing Hellenic Hotel Chamber data, Mitrakos said the number of available luxury beds in the country increased by 52.8 percent in the 2012-2018 period.
In parallel, a recent study by Orbis Research also found that investment activity in commercial, residential and industrial buildings driven by strong tourism flows, government plans to increase the number of small and medium-sized enterprises, and high yield forecasts are set to drive Greece’s construction industry.