Time To Buy In Greece?
New York, New York
My wife was interviewed on Fox Business News yesterday morning. The host Charles Payne asked if she thinks this is a good time to buy property in Greece. He’s not the only one wondering. We’re getting that question a lot.
Is the ongoing crisis in Greece creating an opportunity?
The dollar has more buying power versus the euro than it has had since 2003. If you’re a U.S. dollar holder, this is the best time in 12 years to be shopping for property in much of Europe, including, yes, in Greece, which uses the euro (at least as of this writing).
Does Greece make sense as an investment market? That’s a different question. As my wife explained to Mr. Payne yesterday, the answer to that question is no. While property values are depressed and Greece is among one of the cheapest places to buy real estate in Europe right now (you can buy for about US$2,100 per square meter on average in Athens), this is not a place to invest capital with the hope of return in the form of appreciation. I’d say property prices in this country have a ways to go downward still before we’ll see anything like recovery. Meantime, will the euro continue to devalue versus the dollar? Will Greece continue using the euro or revert to its own currency?
Neither is this a time to invest in Greece for yield. Rental returns are low and falling. The official rate of unemployment is 25%; youth (under 25) unemployment is nearly 50%. Kids are moving back home, families are huddling together, and the local demand for housing is almost nonexistent.
Meantime, tourism rentals likely will suffer this season, as would-be tourists are scared off by liquidity concerns. I’ll digress here to say that I wouldn’t let the ongoing Greek collapse keep you from enjoying a visit to this country. In fact, this could be a great time to be a tourist in Greece. Prices are down, vendors are hungry for your business, and you’d have
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