Athens The real estate market in Greece had just recovered from the ten-year financial crisis when the corona recession is now causing new turbulence. The EU Commission predicts the Greek economy will decline by almost ten percent this year, and the unemployment rate should rise to 20 percent.
But it’s not just the bleak economic outlook that is now weighing on the Greek property market. Massive government intervention is also causing uncertainty. Entrepreneurs who have had to close due to corona restrictions, such as retailers and restaurateurs, can cut their rents by 40 percent.
So it determines a government regulation. The employees of the companies concerned receive the same discount for their apartment rents. In addition, the state supports the employees who are released due to the corona closings with 800 euros per month.
In the meantime, the regulation has also been extended to the self-employed. The Greek Ministry of Economic Affairs did not want to provide precise information on how many tenants can benefit from the state-imposed discounts on request.
The number of employees who were released by Greek companies as a result of the corona shutdown shows the size: 870,510 – which corresponds to 22 percent of all employees.
Economics Minister Adonis Georgiadis justifies the rent discounts to the Handelsblatt as a “one-off measure” due to “the extraordinary circumstances” of the Corona epidemic.
“It was a decision that was very difficult for us,” Georgiadis assures. An allusion to the fact that last year the government of the conservative Prime Minister Kyriakos Mitsotakis started with a particularly business-friendly program. Such regulation acts like breaking a taboo.
The minister of economics expects “no consequences for the real estate market because the measure is only valid for a very short time,” as he told the Handelsblatt. However, there are growing doubts about this.
The regulation was originally intended to apply only to the months of March and April, but was then extended to May. At the same time, the government expanded the group of beneficiaries several times. Another expansion is now under discussion. “We are examining an extension for companies that will remain closed after the end of May,” said Minister of Economics Georgiadis to the Handelsblatt.
Frustration is growing among the Association of Greek Real Estate Owners (Pomida). Especially since the discounts granted by the state have dubious effects on payment behavior. Pomida estimates that at least 100,000 tenants are now claiming the reduction without being entitled to do so. This now threatens a wave of rent disputes, which should keep Greece’s overworked courts busy for years.
Economy Minister Georgiadis assured that the landlords would be compensated with tax breaks “for part of their losses”. However, the landlords have been hearing this for months without the government having previously announced any specific measures. “We not only feel that we have been treated unfairly, but also fooled,” said the association in a protest letter to the government. “The theft of our income and property must end.”
More: “Completely out of touch with reality” – Greece’s hoteliers criticize government corona requirements.