How to open a closed real estate

According to the Ministry of Economy, the Greek government is seeking a solution to the problem of vacant properties in order to reduce prices for both buying and renting. Data from the ministry shows that around 650,000 properties across Greece are empty. Of these, it is estimated that about 150,000 are located in Athens and Thessaloniki. However, among these hundreds of thousands, many are non-residential, and many belong to multiple owners or are secondary homes that have not been used for many years.

In this context, the Ministry of Economy and other interested ministries are seeking solutions and are already considering relief measures for red credit managers (servicers) who have thousands of properties, with the aim of bringing them to market, increasing the minimum investment threshold for Golden Visa applicants, and apartments that Golden Visa holders receive which are not available for short-term rental. At the same time, the tax authority will be "checking" data from providers to determine which properties are vacant and which are rented but not registered with the tax service. According to information, further decisions regarding the "golden visa" are expected soon, after which measures will be taken regarding closed properties.

Five events:

• Large funds that have acquired non-residential properties (red loans, etc.) are facing the biggest problem. Most of them have huge, possibly insurmountable issues that can only be resolved through new legislation. Currently, as the market reports, it is impossible to enter the market, as in many cases it is difficult to obtain an electronic property identifier, while others have minor violations that require resolution. It should be noted that any relief measures taken for servicers will also apply to property owners.
• Between 2% and 3% of the total volume of real estate sales per year is related to investments aimed at obtaining a "golden visa." According to studies, Chinese buyers use the properties they acquire for long-term rentals, while Israelis and Lebanese prefer short-term rentals. Recently, there has been an increase in the sale of properties in areas where the minimum amount of 250,000 euros is maintained for obtaining a "golden visa," such as Piraeus. The Ministry of Economy plans to raise the threshold to 500,000 euros in these areas as well. Overall, in major cities, the threshold will be uniform at 500,000 euros. There are approximately 650,000 vacant properties throughout Greece, with 150,000 of them located in Attica and Thessaloniki.
• The study also examines the amount of investments made by those who purchase real estate in Attica and Thessaloniki under the Golden Visa program, to ensure that they are not directed towards short-term rentals; otherwise, short-term rentals could become a deterrent factor.
• The tax service will conduct an inspection to check for tax evasion and the presence of vacant apartments. An independent tax authority will examine the properties declared as vacant to determine if there are any violations of the law. In fact, the tax service will be investigating whether the apartments that owners have declared as vacant are actually rented out. As part of this requirement, the tax office will request information from the housing management organizations and other providers to determine if there is electricity consumption.

At the first stage, there are the following problems:

• The high cost of repairs. Even the program expected in the future period "I Repair - I Rent" with a 40% subsidy does not seem sufficient to convince owners of closed apartments to put them on the market. In reality, this discount can be obtained on the black market by not providing receipts. Moreover, in many cases, there is no necessary capital, meaning the remaining 60% to start the repairs.
• There are common cases where property is "complicated" because it belongs to multiple heirs. This makes decision-making difficult and slows it down.
• Several properties need "improvements." Small interventions made in the past make it difficult for today's owners to use them. The electronic property identifier may be issued with difficulty. Currently, there are quarterly programs such as "My Home," "Repairing - Renting," and "Social Assistance," and as of January 1, changes have come into effect regarding short-term rentals for property owners with multiple properties, as well as large fines. In any case, these measures are insufficient, and efforts are already underway to find solutions to the significant problems that have arisen.

Price Growth A recent study by the National Bank has shown that demand will continue to accelerate, reaching around 35,000 apartments per year in the coming years, slightly exceeding supply and creating a temporary excess demand of about 30,000 apartments by 2023-24. Data from the Bank of Greece indicates an average annual growth of 13.9% over the first 9 months of 2023, while market data (spitogatos) shows an increase in the average selling price of housing by 11.9% in the last quarter of 2023, with rents also rising. It is worth noting that the accumulated growth in rental prices from 2018 to 2022 reached 50%, and it is expected that in 2023, the annual growth in rental prices will exceed 23.7% in Athens, 22.7% in Thessaloniki, 27.47% in Patras, and 16.53% in Heraklion, Crete.