My margarita-induced take on Greek house prices
A Greek island. A beach bar. Just a man and a margarita…
Yeah, nah, I can’t do it. Sometimes I feel a bit film noir detective when I write these blogs – like I’m hunched over my typewriter, smoke lifting from the ashtray, spilling my troubled mind onto the page.
But not here. Not in Greece. Not looking back across the water to the boat, the sun setting off colour bombs in every direction.
Here, I feel like I should be writing cruise holiday reviews, or at least a lifestyle blog.
“15 Fun things to do with Quinoa, but Jon Giaan.”
It’s hard to not smile. It’s hard to not laugh at your own life actually – to marvel at the journey from high-school drop out to beach bar drop in.
What a trip it’s been.
But here I am.
I’m loving these little getaways. They’ve become an annual pilgrimage. And how lucky am I that I can hole up in a little fishing village, drink ouzo and watch the sunset, all the while telling myself that’s it’s not just a luxury getaway, but also an opportunity to connect with my roots and get to know myself a little better.
R’n’R and a little bit of soul-growth.
How good is that?
It’s been interesting getting to watch the Greek economy recover too. These black swan events do happen. Crises happen. And in every crisis there is opportunity.
Opportunities have been emerging here in Greece, but a little bit slower than I was expecting.
Last week I shared this chart about housing finance in Australia. It’s showing a
strong pick up in mortgage credit, which is opening the way for a strong pick up in prices.
The pick up in housing credit is part of a broader expansion in the finance market, which is a positive sign for the economy too:
Someone asked that if this was happening in Greece too. And if credit would be the bellwether of house price growth in Greece too.
“Is it time to start buying up Greek real estate?” I found myself asking my margarita.
Look, the answer to that is probably, not yet, but maybe soon.
(Though to be honest, I’ve been saying ‘soon’ for a little while now.)
The truth of it is that the Greek economy continues to recover. All the metrics that matter are getting better. Debt is down, growth is up.
Problem is, Greece has a pretty flipping massive hole to climb out of. Like huge. From go to woe, the Greek economy fell 25% during the crisis.
That’s like a decade’s worth of growth gone up in smoke, followed by a decade of going nowhere.
In Greece, it’s still 1999.
What’s worse, Greece is trying to grow its way out of a hole at the same time as the whole world seems to have gone ex-growth.
The latest figures show the Greek economy growing about 2.5%. That’s pretty good. (It’s flipping great given recent form!)
It’s about what Australia is doing right now.
The trouble is, it takes a long time to get out of a whole when you’re growing at just 2.5% a year. You’re going to struggle to get ahead of your creditors at that pace.
But in the modern world, it’s about as much as you can hope for.
So Greece still has it’s work cut out for it.
And when you look at the credit numbers, they’re improving. Growth has been improving over the past year.
But only improving in the sense that growth has stopped being negative. Credit has stabilised. It hasn’t starting picking up yet.
And without a pick up in credit, until we get above that zero line, I don’t see house prices picking up either.
We’re on the way.
But not yet.