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My Big Fat Greek Olympics: How The 2004 Games Tanked Real Estate

My Big Fat Greek Olympics: How The 2004 Games Tanked Real Estate

By Jeff Vasishta August 9, 2016

The 2004 Greek Olympics turned out to be like an expensive wedding, designed to impress the guests but which the hosts could not afford. By anyone’s standards, €9 billion is a lot of money, the most ever spent on an Olympics at that point. Shortly after the final gold medals were awarded, Greece sent out warning to European countries that its public debt and deficit figures would be even worse than expected. Greek taxpayers were on the hook for around €7 billion.

Related: The Olympic Cleansing Of Rio’s Favelas: Pacified Or Gentrified?  

There’s no doubt that under normal circumstances, with an economy that hadn’t made a suicide pact with its host nation, all that infrastructure would have been a boon. The high-speed toll motorway, Attiki Odos, did increase land and property values for a while and large-scale developments had been set in place. With public debt totaling €168 billion in 2004, the Olympics alone was not responsible for the country’s economic collapse. After qualifying for entry to the single currency Euro in 2001, the Greek government went the kind of wild spending (and borrowing) rampage that could have been straight out of Alexander The Great’s playbook.

The economic hemorrhage affected domestic and foreign investment. The tourist industry, one of Greece’s strongest resources, suddenly had no money to market itself, losing ground to other cheaper European destinations like Croatia and Turkey. The lack of cash also meant that the hard-fought Olympic sites—like the Olympic park, and locations for weight lifting, table tennis and gymnastics—went unused and fell into disrepair.

Photo by Galis, CC BY-SA 2.0 / Wikipedia.org

For Greek real estate there’s been no good news for years. Housing prices fell 5.1 percent in 2015 meaning that residential properties are now worth 41.5 percent less than in 2008, when the country declared bankruptcy.

Reuters reported that “Apart from their negative effect on personal wealth, falling property prices also affect collateral values on banks’ outstanding real estate loans, a big chunk of which are non-performing. The real estate market has been hit by property taxes to plug budget holes, a tight credit market and a jobless rate around 25 percent.”

However, if there is any good news on the back of Greece’s woeful economy, it’s that Russian investors are now spending heavily in luxury properties which have fallen by 50 percent since 2009. Their goal is finding a safe place to park their money away from Russia’s own uncertain financial state. Unfortunately for Greece, the Russian investment doesn’t reflect any larger trend. With the government increasing real estate taxes to pay off debt, investment from other nations, fearing another complete collapse, has been minimal. Because of these factors, the real estate market today is 95 percent cash. This means most buyers are priced right out of the market. With no rescue copters on the horizon, the recovery for Greek real estate seems a distant possibility.

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

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