Greece is known for quite some time now to have been struggling with being on the edge of bankruptcy. Amidst the Greek debt crisis, a report in Forbes says that there is a real estate market where many properties are being purchase at the right rates by Russian buyers. Should the rest of the world follow?
Clearly, according to Forbes, Russian investors are taking advantage of the low prices for luxury properties that have dropped on average by 50% since 2009. In addition, this move maybe propelled by the need for these investors to park their money elsewhere to avoid their own current economic crisis and protect their holdings.
On the other hand, it is not really surprising that the Russians have a particular interest in Greece. Russia is known to have been supplying Greece with gas through the $2.27 gas pipeline that the Russians have built in Greece.
But is it really sound to follow the Russians with respect to their investments in Greece? First is low price. According to Forbes, since the 3rd quarter of 2008, the overall price of real estate in Greece is said to have dropped to as much as 40%. Even if investors from other countries are doubtful about investing in Greece, Russian investors continue to demonstrate ongoing interest in Grecian real estate market despite fears of a total failure.
The other factor to consider is that the real estate market in Greece still continues to slide mainly because the government has raised property taxes to help the nation's budget. In addition, apartment prices have fallen by 5.6 per cent in the second quarter of 2015. According to Forbes, this is obviously not a good sign.
The third is that the growing debt crisis continues to fuel fears that if Greece defaults it would trigger a chain reaction among countries facing nearly the same debt situation.
The Russian's must have foreseen something positive in the Grecian real estate.
