Greek property news

Written by Mathew Edwards, Foremost Currency Group (www.foremostcurrencygroup.co.uk)

Last week we witnessed another volatile week for Sterling against the single currency with a 3.2% fluctuation in exchange rates across the week. In real money terms this equated to a difference of over £5500 when purchasing €200,000.

The movements came following a series of economic announcements in both the UK and the Eurozone, further proving the fragile state of both economies and in turn their respective currencies.

The main details of note from a UK perspective came in the shape of the consumer price index (which is a measure of inflation), showing a hike by 0.6% taking the annual rate to 3.7%, higher than the expected 3.5% that had been forecast making the current level the highest seen in 17 months.

This was followed by the bank of England minutes which showed an expected 9-0 vote from the Monetary Policy Committee to hold interest rates at 0.5% and pause its quantitative easing program at £200. The final piece of data released on Friday saw the UK’s budget deficit revised down to £156 from £163, providing a glimmer of hope and welcome news for buyers from the UK in light of a good deal of otherwise negative variables.

With reducing this figure a top priority for newly instated Prime Minister Cameron and Deputy Prime Minister Clegg, the news has been well received as the new coalition government attempt to bring the UK out of the financial crisis it is still in.

In the Eurozone, the biggest news of the week came from Germany where Chancellor Angela Merkel announced a ban on naked short selling. This caused investors to sell off the Euro causing some short term weakness for the single currency. Also, Spain’s central bank has decided to bail out regional savings bank CajaSur with $621.75 million (500 million euros), causing investors to worry that Spain’s savings banks are in more trouble than the country can handle. This was followed by negative economic sentiment figures from Germany, Greece and the Eurozone as a whole. The fragility of the Euro is sending shockwaves through the EU, as in the case of the Greece bail out package, Greece will benefit yet the German economy will suffer. As these countries lean on one another in the interest of generating support for the single currency, it inevitably feels the strain of such economic unrest.

Euro weakness hurting the pound (Risk Aversion)

The weak Euro is also not helping the pound. All of the euro worries have led to general weakness in risky assets and that’s typically not good news for sterling. It’s more selling of risk than anything else – Sterling is seen as a riskier currency, and so when things are uncertain as they are now, it drives investment towards the safe haven US Dollar – that’s why we have seen Dollar strength of late, and the pound and Euro are comparatively weak. This trend was kick-started by the downgrading of Greece’s sovereign debt rating and as people took to the streets of Athens, concerned investors moved their money from the Euro to the safe haven US Dollar. The downgrading of Spain and Portugal swiftly followed and a fortnight ago at a summit of EU leaders in Brussels, reports surfaced of Nicolas Sarkosy threatening to pull France from the Euro if Germany failed to fall in line with the proposed bail out plan for Greece. Although these claims have since been denied, Germany did conveniently change their tact and agreed to fall in line.

What does this mean for people buying property in Greece?

For people looking to buy a property in Greece or on any of the Greek Islands, this may be an opportune time to take advantage of the weakening Euro. If you are looking to exchange Sterling, Scandinavian Krona or Swiss Francs to Euros for your property purchase on Skopelos or anywhere throughout Greece, you are guaranteed to get a good live commercial rate when using a specialist in foreign currency exchange. The difference between a commercial rate and the tourist rate can mean a difference of thousands when exchanging larger sums. Specialists can be found at brokerages like the Foremost Currency Group www.foremostcurrencygroup.co.uk , where I will be able navigate you through the entire process of foreign exchange, keeping you aware of what the markets are doing and why.

Contact Mathew Edwards - Click here
Currency consultant and FX Trader at Foremost Currency Group
www.foremostcurrencygroup.co.uk

For information on how to buy in property in Greece
Buy a home in Greece
Buying property in Greece – Legal information

See our property page
Property for sale in Skopelos Greece

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Sterling makes the most of its I’m-not-a-euro credentials. Euro has no such defence to Greece’s problems.

The pound drifted down from €1.14 to €1.13 before jumping nearly two cents higher on Thursday. It peaked at €1.1550 on Friday and opened in London this morning at €1.15.

Sterling has been doing its best to develop a career in not-being-a-euro. With the problems in Greece holding investors’ attention, the pound wore a badge of non-involvement on its sleeve.

The Bank of England’s Quarterly Inflation Report (it does what it says on the tin) raised the spectre of a further round of quantitative easing. It was a possibility that sterling’s supporters would have preferred not to see. There is still the impression – warranted or otherwise – that the Bank is happy to see the pound weaken and that it chooses its language to help that cause.

And if the statements out of Paris, Berlin and Luxembourg over the last few month are anything to go by, the majority of Euroland finance ministers would like to see a more competitive (i.e. weaker) euro. This might explain why they have put so little effort into reassuring investors about their plans to help Greece out of its budget bind. An ‘agreement’ in that direction masterminded by the EU last week was worth less than the very small piece of paper it was printed on. In order to gain the approval of France and Germany it had to be pruned so severely that all it said was ‘Don’t worry’. Its exact wording was ‘Euro area member states will take determined and coordinated action if needed to safeguard stability in the euro area as a whole.’ As reassuring statements go it was useless.

It did not help matters for the euro when revised figures for the fourth quarter of 2009 showed slower economic growth than previously thought. Until EU leaders can formulate a coherent and credible plan to make Greek government bonds saleable the euro will remain weighed down by fears about the fiscal viability of Club Med.

After three months spent between €1.09 and €1.13 the pound has attached itself to a slightly higher range between €1.13 and €1.16. For the moment, the euro’s Greek albatross is a significant burden, balancing investors’ slightly different worries about Britain’s political and financial situation. Moneycorp suggests that buyers of the euro investing in the Greek property market should take advantage of any spikes to hedge 50% of their exposure.

The pound and the dollar are likely to strengthen further against the euro. This is subject to the UK economy continuing to claw its way out of recession and the decision of what the Euroland finance ministers will do to help the economy in Greece. In this short term situation, buying property in Greece is cheaper for UK and US buyers.

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate. Currency specialists like Moneycorp often offer much better exchange rates than high street banks, and their expert dealers offer you guidance to help to ensure you are sending your money to Greece when the exchange rate is at its peak within your given time frame

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate. Currency specialists like Moneycorp often offer much better exchange rates than high street banks, and their expert dealers offer you guidance to help to ensure you are sending your money to Greece when the exchange rate is at its peak within your given time frame

For information about setting up a bank account in Greece and Skopelos please see: Legal info

To find out about the best ways to transfer money to Greece and Greek Islands

Please contact:

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Roger Fox – Glossa Houses, Skopelos, Greece

Within minutes of France and Germany publicly pledging support for Greece in its struggle to reduce the budget deficit, the euro went from 1.15 to 1.13 against the pound.

Two hours later, when it became clear that no figures were going to be attached to these pledges, the pound went back to 1.15. Two days later it is 1.152 and the currency markets are predicting that the euro will weaken further over the short term.  Today Monday 15th February 2010 the euro is 1.157 – Moneycorp

Clearly, this situation will continue until “support for Greece” becomes a proper financial package. Under normal circumstances, this would be a job for the IMF, but it is difficult for leaders of the eurozone countries to have the IMF saving the euro.

Perhaps more important in the world of realpolitik is the fact that the current head of the IMF is Dominique Strauss-Kahn and a potential future challenger to French President Sarkozy; the sight of Strauss-Kahn riding in on a white charger to rescue the euro would be politically unwelcome – to understate it massively. Therefore expect delay.

Greece has two important dates coming up when the government has to repay outstanding loans – 20th April and 19th May. Given that a Greek default cannot be allowed to happen, something will have been fixed up by then. The smart money says that the eurozone leaders will swallow their pride and allow the IMF to sort out a loan for Greece.

Before that happens, the pound and the dollar are likely to strengthen further against the euro (subject to the UK economy continuing to claw ts way out of recession), making Greek property cheaper for UK and US buyers in the short term.

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Buyers beware: Local Estate Agent trading under our name without agreement in Skopelos Greece

It has recently come to our attention that our copyrighted company logo ‘Angels’ has been reproduced and is being used to sell property and land on the island of Skopelos without our permission.

Angels Greek Island homes is a separate company and has no affiliation with ‘Angels’ For Sale – Homes and Land’ operating locally on the island of Skopelos by Angelo. We therefore can take no responsibility for any property sales or transactions carried out with this real estate agent.

Please see how our copied and reproduced Angels logo looks in the sign below. It does not contain the words ‘ Greek Island Homes’  like our logo

Warning: We do not work with the Estate Agent (Angelo) trading under this name

=========================================================

Our Angels Greek Island Homes Logo looks like this:

N.B. Please be aware of the difference between the two logos as Angels Greek Island Homes can take no responsibility for any property sales or transactions carried out with ‘Angels’ FOR SALE HOMES & LAND. This is not our company and is not in anyway affiliated to us.  Please see: First report

If you need any further advice or have any queries please contact us

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Edited weekly euro update provided by Deane Roe of Moneycorp

Rising Sterling creates a window of opportunity for Greek Property Market investors.

It was a rewarding week for sterling, climbing from below €1.16 last Monday to open at €1.1810 in London this morning. There was moment’s panic at the very beginning of the week when the pound dipped briefly to €1.15 but thereafter the only way was up.

Sterling’s performance over the week obviously had something to do with the UK economic data – few thought they were – but mainly it was the by-product of another quiet week during which the mood of investors became more upbeat. As one of the allegedly riskier currencies it is more likely to find buyers when the market is less nervous.

The euro’s profile last week was so low as to be almost subterranean. An almost complete absence of pan-euro-zone economic data meant just three useful statistics. Consumer confidence improved slightly from -25 to -23. Inflation – make that deflation – went down from -0.1% to -0.6% in the year to July and unemployment ticked up from 9.3% to 9.4%. Individual national figures did not add much to the proceedings. German consumer confidence was higher and German unemployment was steady at 8.3%. As with sterling, the euro’s main claim to fame was to provide investors with an alternative to the US dollar, which was under pressure throughout the week.

Sterling starts August looking more potent than it did in July. It appears to have punched out of the €1.15-€1.17 range that held it for the previous three weeks, helped by its upward break against the US dollar. The high in June at €1.19 was sterling’s best level since the beginning of December and that must be its next target. The pound has the potential to test €1.21 but, up here close to eight-month high, buyers of the euro looking to invest in the Greek Property Market should take advantage of the higher rate.

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate. Currency specialists like Moneycorp often offer much better exchange rates than high street banks, and their expert dealers offer you guidance to help to ensure you are sending your money to Greece when the exchange rate is at its peak within your given time frame

For information about setting up a bank account in Greece and Skopelos please see: Legal info

To find out about the best ways to transfer money to Greece and Greek Islands

Please contact:

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Conti are a Licensed Credit Broker offering mortgages for property in Greece

How much can I borrow and what proof of income is required?

If you require finance to purchase your overseas property, then Conti a Licensed Credit Broker who have over 16 years experience in the market could assist you in buying your Greek Island home.

Mortgages are only available to U.K residents buying homes in Greece.  Loans are currently available only in Euros.

Based on the valuation or purchase price, whichever is the lower, of the Greek residential property, UK applicants can borrow up to 70% for purchase Mortgages and construction loans.
For all schemes there is a minimum loan of €250,000. There is no maximum. For construction loans it is €250,000 min. The maximum term of the loan is 25 years – available up to age 70.

Current interest rates as at 20th July 2009 are from approx. 3.38% Variable for Repayment loans.

For example: A Repayment mortgage of approx € 250,000 over a period of 25 years at an interest rate of approx 338.% Payment would be approximately € 1247.65 per month. The total approximate amount payable over a term of 25 years is € 374,295

Valuation fees £125.
1% of loan amount is the banks arrangement fee.

All schemes require full documentary evidence of income

Please note, that there are no non-status/self-certification mortgage facilities available in Greece (although renting out your property is permitted), all loans need to be supported by a minimum requirement of proof of income, i.e. if employed – copies of your last three month’s pay slips & copies of your latest P60/Employer’s Reference together with copies of your last 3 month’s Personal Bank Statements will be required or alternatively if you are self-employed – copies of your last three years Audited Accounts & copies of both your last 12 month’s Business and last 6 month’s Personal Bank Statements will be required on application.

Unfortunately in Greece the Lenders will NOT take into consideration any proposed Rental Income from the property for mortgage purposes.

Your loan is based on your joint net “take home” pay and is calculated on an affordability basis. To qualify for a mortgage in Greece, a calculation is used to establish whether you can afford to maintain the mortgage repayments.

All your existing liabilities, including any mortgage/rent payments,, UK council tax, loans, credit card payments and any maintenance (EG: Divorce) payments are taken into account, together with your proposed Greek mortgage payments must not exceed 30% of your net monthly income.

For example: If your net joint monthly income is £3,000, 30% of that figure is £ 900. If your only liability is your current UK mortgage payment of say £500 per month, this would leave a balance of £400 for your Greek mortgage repayment.

Other documents will be required and will be confirmed when application forms are sent to you. Please visit website or speak to an adviser. Conti have a ‘quick quote’ calculator that will enable you to find out how much your monthly payments will be, or complete an online enquiry form to receive an Approval in Principle certificate and quotation.

PLEASE NOTE: THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
PLEASE NOTE THAT AS THE LOAN IS SECURED ON THE OVERSEAS PROPERTY IT IS NOT COVERED BY THE UK CONSUMER CREDIT ACT OR THE FINANCIAL SERVICES AUTHORITY.
CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT OF YOUR DEBT.

Contact Conti for overseas mortgage advice or a quote.

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Edited weekly euro update provided by Deane Roe of Moneycorp

Protect yourself from fluctuating exchange rates

A rally at the beginning of the week was followed by an even sharper return to base on Tuesday. After only a little hesitation the pound embarked on a downward path that saw it test €1.16 twice. A Thursday recovery almost to €1.1750 was short-lived and it opened in London this morning (Tuesday 7th July 2009) down at €1.15.60 a cent and a half down on the week.

This may look like a pretty gloomy time to invest in Greek property as the power of the Great British Pound weakens and we end up with fewer Euros. If you are currently planning to buy your Greek island villa, property contracts in Greece can take a few months to complete. Guidance from dealers in the euro are forecasting a rise to €1.20 by the end of the year and their suggestions are to either forward buy and lock in at the current commercial euro exchange rate before it dips further, or to use Stop Losses and Limit Orders.

With exchange rates constantly moving, you may not have time to watch the currency market 24 hours a day in order to achieve the best rate in your time frame. Moneycorp, foreign exchange specialists, can do this for you free of charge. They use a number of mechanisms to ensure you are protected from negative exchange rate movements, and enable you to take advantage of positive ones.

One of the options open to you is to use Stop Losses and Limit Orders. For example, if the current exchange rate of the GBP v Euro is €1.15 but you need to achieve €1.17 to be able to afford to buy your dream property in Greece, Moneycorp would set a Limit Order at €1.17. This means that if the market hits €1.17, even for a fraction of a second at 3 o’clock in the morning when you are in bed asleep your currency would be automatically bought at this level.  This is a great way to have the market monitored 24 hours a day, 365 days a year for you.

Stop losses are used in a similar fashion.  Imagine the current rate is €1.15, but you cannot afford your property if the rate drops below €1.13.  You would like to hold on and see if the exchange rate improves in your given timeframe. A Stop Loss can be set and will be triggered if the rate suddenly plunges below €1.13.  Even if it falls much lower than €1.13, you can be safe in the knowledge that you’ll still be able to afford your Greek Island home in the sun because your currency was bought for you, automatically.

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate.

For information about setting up a bank account in Greece and Skopelos please see: Legal info

For more information or to find out about the best ways to transfer money to Greece and Greek Islands

Please contact:

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Edited weekly euro update provided by Deane Roe of Moneycorp

A three cent range kept sterling comfortably between €1.16 and €1.19. It opened in London this morning at €1.16, a cent down on the week.

The Sterling has dipped this week. Is it still a good idea to invest in the Greek property market?

In the opinion of Angels Greek Island Homes, property prices are still a lot cheaper as the economy tries to recover from the credit crunch. If the pound fluctuates a cent here or there week to week, it would not make that much of a difference on a €100.000 sale. When buying property in Greece contracts can take months to complete and money can be transferred on a day when the commercial euro rate improves, or by forward buying to lock into the currency rate. There is suggestion that Buyers of the euro should bide their time, using a stop order to protect against a reversal but this is generally for day to day business transfers.

It is the much bigger dips that we U.K buyers worry about. There is hope of the euro breaking the physiological €1.20 barrier then stabilizing. This of course would make us feel a lot more confident when buying our dream Greek Island home.

This is where Forward buying the euro to lock into the currencey rate may be the answer.

Since exchange rates are always on the move, foreign exchange specialist Moneycorp, offer the option to ‘lock’ into the current rate of exchange for up to 2 years. For example; Should there be a move back to the €1.10 level from current €1.16, forward buying would save you in excess of £5000 on a £100,000 transfer.

Alternatively, you could use a stop loss and/or limit orders. This is where you instruct your personal dealer to either automatically buy your required currency, or contact you should the exchange rate reach a certain level.

Support and Resistance levels

When watching the currency markets, a foreign exchange dealer will monitor movement within a range. This range is determined by 2 indicators, support (low) and resistance (high) levels. For example, the current range of the Euro would be 1.16 to 1.20. As a buyer, you would look to purchase your currency at the higher end of this range. Imagine support and resistance levels as a room with a floor and ceiling, and the exchange rate as a rubber ball. The ball will bounce off the floor and hit the ceiling, and bounce back down to the floor, back up to the ceiling and so on. At some point, the ball will break through either the floor (support), or the ceiling (resistance). In the real world, the support or resistance level is weakened by data coming out of the market, such as retail sales figures, consumer confidence data, interest rate announcements etc. If there is enough positive or negative data, the exchange rate will break either the support or resistance level, and begin trading within a new range. Your foreign exchange dealer will use their currency market knowledge to provide you with guidance, helping to protect you from negative movements and enabling you take advantage of the positive ones.

It is always best to transfer currency to Greece via the commercial rate and not the tourist rate.

For information about setting up a bank account in Greece and Skopelos please see: Legal info

For more information or to find out about the best ways to transfer money to Greece and Greek Islands

Please contact:

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Edited weekly Euro update provided by Deane Roe of Moneycorp

As the sterling  grows stronger against the euro, now is the time  to buy houses or land in Greece

UK industrial production rises in April. G8 endorses dollar as reserve currency. Euroland industrial production continues to fall

The pound powered ahead from last Monday’s €1.14 opening. It paused at €1.16 on Tuesday before proceeding up to €1.1750, where it opened in London Monday morning.

A much-reduced flow of UK economic data did no harm to sterling. The figures were a long way from perfect but they were an improvement over what had gone before. Even more important, they were generally better (or less worse) than anything the opposition could produce. The Royal Institution of Chartered Surveyors and the government both saw a slowdown in the falling price of real estate. The best news of all came with the manufacturing and industrial production data for April. Both were up on the month. Industrial production rose by 0.2%, slowing the annual rate of decline from 13.1% to 12.7%.

With the ratings agencies still on the rebound from their overgenerous treatment of sub-prime securities they are showing how tough they can be. Ireland has become one of their favourite targets. Standard & Poor’s awarded it another downgrade last week, the second in as many months. It went down from AA+ to AA and there could be more to come. Ireland is not Euroland but its downgrades – and those of Greece, Portugal and Spain – do not help sentiment towards the euro.

Sterling has at last laid to rest the spectre of endless technical resistance in the €1.15-€1.17 zone. Britain’s economic data remain consistently better than those coming out of the Euro zone. As long as this continues the pound will have scope to extend its recovery. Buyers of the euro Investing in property or buying a holiday home in Greece should ratchet their stop order higher again, this time to somewhere below €1.17. The next obvious obstacle is the psychological one at €1.20. Beyond that the more important technical resistance is the early December high in the region of €1.2150. In time that too should give way but perhaps not without another visit to €1.16 in the meantime.

It is always best to transfer large sums of money to Greece via the commercial rate and not the tourist rate.

For information about setting up a bank account in Greece and Skopelos please see: Legal info

For more information or to find out about the best ways to transfer money to Greece and Greek Islands

Please contact:

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Edited weekly Euro update provided by Deane Roe of Moneycorp

A promising start to the week took sterling up from €1.15 on Monday morning to a high of €1.1650 on Wednesday, whereupon it all went sour. A rapid two-cent fall at that point was followed by more damage on Thursday and the pound began Friday below €1.13. Investors have been surprisingly kind to the pound since then and it opened in London this morning at €1.14.

The economic data continued to favour sterling at the beginning of the week. Once again Britain led the way in the Purchasing Managers’ Index stakes with the UK manufacturing PMI rising nearly two points to 45.4. The Euro zone measure also improved, to 40.7, but was still adrift. The German figure was well behind at 39.6.

It was even better news on Wednesday with the services sector PMIs. Investors had been looking for a one-point improvement to 49.5. What they got was a three-point increase to 51.7, putting the UK services PMI in the expansion zone for the first time since April last year. The equivalent Euro zone figure was seven points behind. And
Edited weekly Euro update provided by Deane Roe of Moneycorp

what was the reaction of investors to this outstanding news? Why, of course they sold the pound. Sterling/euro’s six month high coincided precisely with the announcement, suggesting that speculators had used the good figure to offload their long positions.

Beyond the PMI figures the Euro zone had little to say for itself apart from a modest 0.2% retail sales uptick in April that left the overall level still 2.3% lower than a year earlier. In Euroland, as in Britain, the central bank decided against adjusting its policy interest rate, preferring still to go down the “quantitative easing” route and buying covered bonds (or, in the case of the Bank of England, gilts).

The combination of technical resistance and politics has put sterling on the defensive, particularly against the US dollar but also against the euro. The big risk is clearly politics and not, at least for the moment, economics. New Labour has been slaughtered at the European and local government elections and there has been a similar, broadly anti-left, backlash throughout Europe. If Mr Brown finds himself with another wobbly cabinet the market may again take it upon itself to teach sterling a lesson. Buyers of the euro investing in property in Greece or buying a Greek holiday home should place a protective stop order in case of disaster but otherwise look for the pound eventually to break above its current constraints.

It is always best to transfer large sums of money to Greece via the commercial rate and not the tourist rate.

For information about setting up a bank account in Greece and Skopelos please see: Legal info

For more information or to find out about the best ways to transfer money to Greece and Greek Islands

Please contact:

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