food / travel

Hunting For Holiday Home Bargains In Crisis-Riddled Greece

For some northern Europeans, Greece’s economic crisis may be just the opportunity to finally have a sun-soaked Mediterranean vacation home. Property prices are down, with some sea view plots going for as little as 30,000 euros. Still, would-be buyers shou

Your pick of paradise at bargain prices (grosz3city)
Your pick of paradise at bargain prices (grosz3city)
Richard Haimann

RHODES--The evening breeze caresses Mount Attavyros, riffling through the leaves of the hibiscus bushes that cover its slopes. The highest mountain (1,215 m or 3,987 feet) on the island of Rhodes played an important role in Greek mythology.

It was here that the hero Althaimenes prayed to Zeus to change the gruesome fate that had been predicted for him. People on Rhodes are praying today, too – to be spared the fate of so many in the present crisis: unemployment, poverty, loss of standing.

And their prayers are apparently being heard: despite striking airline crews and taxi drivers, 30% more tourists visited the island last year than in 2009, the Association of Greek Tourism Enterprises (SETE) reported. That keeps a lot of jobs going.

But a lot of the visitors aren't there only for rest and relaxation. They see the crisis in Greece as an opportunity. Many are looking to snatch up holiday real estate cheaply, says Georg Petras, an agent for the German firm Engel & Völkers on Rhodos. "Already last year the number of enquiries was three times what it normally is."

And this year, the number will probably be even higher. Since the beginning of the crisis, prices of villas and apartments on the island have fallen by as much as 30%. "You can buy houses with 100 m2 of living space, in good locations, for 130,000 euros," Petras says. Villas in the most desirable areas on the east coast have been known to go for as little as 1,700 euros per square meter.

On the mainland and on other islands, real estate prices have fallen even more dramatically. Some houses have been put on the market at 50% of their value before the crisis. But even at those prices there are often no buyers.

Rich Greeks prefer to invest their money in German and Swiss real estate, because they believe it's a way for their capital to escape the long arm of Greek tax authorities. If they're not rich, Greeks simply don't have the money to buy property. According to a study by the country's national bank, there were 60% fewer real estate sales last year than in 2008.

Foreign buyers still have reasons to hesitate

For Germans, Austrians and Swiss who dream of owning a sunny Mediterranean home, the collapse in prices makes Greek real estate a very attractive option – although many are skeptical about whether Greece will manage to shake itself out of recession and stay in the euro zone.

"Some potential buyers fear that if they buy in euros now, they might be looking at drachmas if they sell somewhere down the road," says one mainland real estate agent. Another dampener for potential buyers: the massive anti-reform protests in Greece. "And all the strikes, particularly by airlines, make them wonder if they're going to have trouble getting to their home when they want to use it," he adds.

But there's another reason not to rush into buying a holiday home in Greece: there still isn't a functioning cadastral system, so any purchase involves convoluted research into property rights.

The Greek government, however, is on to this problem and wants to work with cadastre experts from other E.U. countries to solve it. Minister of the Economy Anna Diamantopoulou says the plan is to have all property registered by 2020.

The government also wants to introduce a new digital permissions procedure so that decisions on new constructions can be made within a few weeks. Underlying this move is the hope that foreign investors will build new vacation real estate – on government-owned land that Athens wants to sell to fill empty state coffers.

The Hellenic Republic Asset Development Fund (HRADF) presently manages 50 billion euros of state assets in company shares, licensing, and mainly real estate. Deutsche Bank estimates the value of the land and real estate holdings alone at 35 billion euros.

The available land includes both plots on the islands and coastal plots on the mainland. If Athens can sell them to project developers it could be a boon for the Greek construction industry and help lower unemployment figures.

Spain, a model not to follow

Specialists like the German G.I.S. Global Immobilien Service, which has been building holiday real estate in Greece for 14 years, are delighted with the plans. "The speed at which new second homes and homes for folks who want to retire to a sunny climate will be approved will be unmatched in Europe," says Christian Seyrer, the firm's general manager.

Greece presently offers the cheapest building land by far in the E.U. Mediterranean area. "You can get plots with a sea view for 30,000," says Seyrer. Furthermore, salaries in the construction sector are low. "An 80-m2 holiday home with a terrace can be built to German quality standards and sold for 95,000 euros," the general manager says. "The markets in France and Italy for second homes and retirement homes can't compete with that."

But will there really be a building boom in Greece? Greek banks don't have the capital to finance it, and it remains to be seen if interested German, Austrian and British interests won't settle instead Spain.

Real estate prices collapsed there too after the gigantic speculation bubble burst in 2008. Development on the Iberian Peninsula shows how dangerous it is for the economy of a country to depend too heavily on the construction and real estate industries.

When the euro was introduced, the interest rates on building loans went down significantly in Spain, so ever increasing numbers of Spaniards bought their own first and second homes. Developers kept building, and the banks were happy to make money available. Everyone believed in a happy ever after success story – until the bubble burst in 2008 and brought the whole country down. The price of real estate fell by 55%.

Read the original article in German

Photo - grosz3city

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Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.

Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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