A large cobalt blue and khaki painting by street artist Cacao Rocks with Delos’ lions and Cycladic amphorae dominates the walls of Sotheby’s International Realty office on Voukourestiou in Central Athens. Old Greek masters vie for attention with emerging contemporary artists. The focus on art is intrinsic to the brand’s DNA, and Sotheby’s carefully curated real estate portfolio boasts some of the most covetable properties on the planet. The Greek market’s share of the global luxury real estate pie might be woefully small, but with 18 record sales driven by Sotheby’s in just one year, Savvas Savvaidis is justifiably upbeat. As an Economics graduate from Bologna University, he believes in raw data, and by all indications, the luxury real estate industry in Greece is set to have a bumper year, he affirms.
Sotheby’s has long inhabited the global luxury space, but mainly in art and jewellery until previously. How did the crossover to property take place?
The Sotheby’s brand dates back to 1774 and around 50 years ago, it leveraged on the power of its brand as a prominent auction house to diversify into lux- ury real estate brokerage. The long-term relationships established over generations, and the demand from its art-buying clientele for ‘empty walls,’ informed the need to curate a portfolio of rare properties. The UHNWIs (whose net worth exceeds $30 million) are a tribe unto themselves. At that level, it’s not about bricks and mortar; it’s about nurturing a certain lifestyle, of creating a deeper connection. At Sotheby’s, this is a world we understand well.
What kind of properties would qualify to be included in the Sotheby’s portfolio?
When considering a property for Sotheby’s portfolio, price is but one factor. Of equal importance are architectural style, which must always appeal to our audience, and condition, meaning properties must be move-in ready. And of course, location, and micro location is very, very important. Since Greece is connected to the sea, sea views are critical, as is an authentic and pristine environment. The less human intervention, the better.
How does Greece compare with other international luxury destinations?
Our clients tend to find Greece more hospitable than other markets. Greeks speak English, and they are very warm. Business-wise, Greece is 25% more affordable than other markets such as the South of France, Miami, St. Barts, the Hamptons, Aspen or Tuscany, so the potential is huge. Greece is among the top ten countries with the longest coastlines. It’s a safe destination within Europe that has preserved a pristine, authentic lifestyle and with amazingly clear waters. There is no heavy industry polluting the air or the sea. So, it’s like you’re taking a trip in the past.
How have the war in Ukraine and the Covid pandemic impacted real estate activity in Greece?
The pandemic is very different from the invasion. The pandemic has been a catalyst, an accelerator for the luxury real estate market in Greece. It led to an incredible number of transactions overnight. Whether it was remote working or unsustainably high rents in Manhattan or Paris, a lot of people questioned the value of living in cramped quarters, without a garden or extra zoom rooms or a gym. People have moved back into cities but that traumatic experience of two years on zoom made them invest in a different kind of life insurance. There were a lot of epiphany moments. The epiphany moment is when you’re 60 years old, you have a net worth of a few million. You are a workaholic. And then the pandemic teaches you that you’re not immortal anymore. Because some things are out of your control. No matter how much money you have, you can die the following day. And then you decide to buy that house in Greece that you have always been talking about. This epiphany moment worked brilliantly for the luxury real estate market.
The Ukraine situation is different. After a period of shock, we’re now talking about the economy. As you’d expect, we already see signs of recession, which is obviously again, another change. So, you can’t really forecast about the economy, because the economy is about people’s behaviour. It’s not about money. It’s about feelings – about how safe you feel. Consumer confidence in the UK is low. From the data we have, we see that there is an impact on demand. So, the years have been crazy, like 200% increase in relation to last January. And then minus 30%.
An interesting observation is that the countries that lead in tourist arrivals are the very same ones leading the demand for Greek luxury real estate. Is that a coincidence or do you think that tourism has a real impact on secondary home purchases?
It’s easier to sell to someone who already knows the place, right? Tourism helps. However, I’d like to point out that 50% of assets are being sold to people who have never visited the place before. Sotheby’s first sale in Greece took place in Naxos in 2016. It was a university professor from Los Angeles who had come here in the middle of winter. He knew the house by memory. The floor plans by memory. But he had no clue which island we were on! The decision-making process for the people that buy our properties is super-fast. I would say that they know exactly what they want. Having said that, a carefree summer holiday in Greece often works positively towards taking that next step of buying property.
What are some of the key real estate development projects that in your opinion will alter Greece’s real estate offering? Will the Ellinikon project propel interest in the Athens Riviera?
Well, I think that number one, the Greek luxury market is a very small market. The volume of sales of the entire country equals the volume of sales in Mallorca for the luxury market. So, if you open up The Times or the Financial Times, you don’t see Greek ads. It’s all about awareness. A legacy project like Costa Navarino, where the owners invested half a billion euros – that creates awareness of the destination.
So, the Ellenikon project will be a catalyst, and there will be a spillover effect on the quality of life. If you follow Athens’ evolution as a city, it was the Acropolis towering over a jungle of concrete. And you never made the connection of Athens with the sea. It’s very bizarre, because Athens has the longest coastline as a European capital! There is new found interest in the southern suburbs of Athens.
– 2021 enquiries from international second-home buyers were +120%, year-over-year.
– 2021 demand levels were of €4,2 billion
– 2021 saw historic transactions up to €16,700 per m2 in waterfront homes
– Sotheby’s in Greece currently holds 18 record sales in prime locations
– In Greece, Americans, British, French, Swiss and Germans still lead the demand for the 2022 sales season
– Corfu, Mykonos, Athens and Crete are the most sought-after locations
– Demand for islands like Paxoi, Folegandros, Ithaca and Syros is emerging
– Sotheby’s customers own an average of 5 luxury holiday properties around the world
‘It was a blessing for the Greek real estate market coming out of the worst recession in European history’
Buying property in any international location can be complex. What policy changes would you like to see implemented in Greece to make remote property buying easier?
In addition to lack of inventory, which is the same problem in many markets, now, there are two big problems. First, there is no comprehensive database of transactions. So, transparency is number one. In the US or UK, for example, you can find out immediately how many properties have sold in a particular location. Here, in Greece, such information is maintained by the banking system, which has data only for mortgages, so it’s not a true picture of all transactions because there are a lot of cash transactions. Second is the speed of processing. It’s still outdated. The average closing time is five months!
How disruptive have private equity funds and other forms of corporate capital investing in real estate been to the property market dynamics in Greece?
They’re mostly focused on hotels and commercial real estate. There has been a wave of foreigners buying buildings mostly in the centre of Athens. But there isn’t a wave of investors for mixed development because of the delays. A lot of young people retire by the time the licencing comes through!
Describe a Sotheby’s customer.
It’s a very small community of ultra-high net worth individuals who have a very similar lifestyle. They’ve been to similar schools, holiday in similar locations and they all know each other. They are citizens of the world. They all speak English. They share similar inter- ests and lead very similar lifestyles.
‘I’d like to point out that 50% of assets are being sold to people who have never visited the place before’
What is your opinion on the seemingly underregulated glut of Airbnb properties in the city centre that have rendered housing too expen- sive for locals? What correctional mechanisms would you suggest?
It was a blessing for the Greek real estate market coming out of the worst recession in European history. So, yes, a stream of income helped people keep their properties which they might have otherwise lost. The Airbnb craze also improved the existing stock of homes thanks to renovations. On the downside, there has been an erosion of neighbourhoods. It seems likely to me that Greece will need to adopt new regulations with regard to Airbnb similar to those that have been adopted in other countries.
What extra services does Sotheby’s offer its potential clients?
We’re a brokerage house. So, the most important service we do is our catalogue of 400 homes. We cover the whole country. We fly out, we see homes, we reject 90% of the listing proposals. It’s hundreds of hours of work that goes into the catalogue. And that’s our number one service. We create a database where none exists, and we make it easy for our customers to decide. And the service is always personal. We do it ourselves. We fly out the same day, by boat, by car or by helicopter to serve our clients. We don’t delegate it to a local guy to open the door.
An interview to Sudha Nair Iliades for Athens Insider, Edition Summer 2022