Strategic edge held by Greek property under threat from Ukraine war
Greece’s real estate market could avoid being hit and weighed down by the war in Ukraine if the military conflict ends in coming months, according to Piraeus Real Estate CEO Giorgos Kormas.
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Speaking at the Prodexpo North conference held in Thessaoliniki, Kormas said that if the crisis spreads and that European countries slip into recession then that will hit Greece particularly hard as the country will lose its strategic advantage and that more mature markets, such as French assets, will draw buyers looking for buying opportunities..
"Real estate has a strategic advantage, it reacts to crises with a time lag to the order of eight to ten months, depending on the asset class. So, if in the meantime the crisis eases, if we will be lucky and avoid falling," he said.
"If, on the contrary, things do not go well and we have a necessary recession, this will affect Greece, which before the Russian-Ukrainian crisis was a hot spot for international investors, who saw it as an investment destination with beauty and substance. If the crisis continues, markets that are more mature than ours, such as France, will follow a corrective course, so investment opportunities will be created in them as well, resulting in a loss of Greece's strategic advantage," he said.
Asked whether the strong inflationary pressures will result in higher costs being rolled over on to the public sector's construction projects and how their implementation will be affected, Kormas estimated that "for the projects that will now be auctioned, it would be good to listen to the side of those who will build them," pointing out that a company that will sign a contract today, in six months will face other data, so there needs to be some additional clauses. "The increases cannot be absorbed by the construction sector, they will be passed on to the next day," he said, adding that in a country that experienced a fiscal and then a banking crisis, entrepreneurs under pressure first pay energy bills and then the tax office, leaving banks last in line.