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Cash starts to trickle back in to Greece

Monday, October 22 15:10:34

After scrambling to get their money out of Greece as the economy collapsed, Greeks abroad are regaining an appetite for shares and property at home, spurred on by bargain prices and a bet that their country will stay in the euro zone after all.

Property investors and agents say interest in real estate has jumped since the summer and there are tentative signs the financial exodus is slowing, according to central bank, stock market and investment flow data.

"There are deals that didn't make sense but do now as the outside world takes the government more seriously," said Kostas Kazolides, a London-based investor who has been investing in and advising on property deals in Greece and Cyprus for 35 years.

"People are talking about going back in and buying. There are villas in Mykonos going at 30 percent of their value because sellers are feeling the pinch," he said. A 30 percent fall in construction costs was another attraction.

Fears that investments and bank deposits would be redenominated in a rapidly devaluing new Greek currency if Greece left the euro had put the brakes on international investors buying assets like property and shares on the cheap in recent years.

But a coalition government led by conservative Prime Minister Antonis Samaras that came to power in June has made a positive initial impression on some investors by pledging to do everything needed to keep bailout funds flowing, easing fears of bankruptcy and euro zone exit.

There are signs European policymakers are becoming more conciliatory towards Greece, including German Chancellor Angela Merkel ruling out letting the country default on its debt, making the country's exit from the single currency look less likely for now.

Analysts at U.S. bank Citigroup changed their view earlier this month that Greece would almost certainly leave the euro, lowering its probability of such an event to 60 percent from 90 percent, mainly due to a change of attitude by other euro zone governments. (C ) Reuters