The price of apartments to be built in the Hellinikon complex will be close to the levels of used homes in the broader area as Lamda Development is set to benefit from a three-year freeze on VAT for new buildings and prepares an aggressive marketing plan on the investment.
Speaking to shareholders at an extraordinary general assembly on Thursday, Lamda boss Odysseas Athanasiou presented the company's investment plan for the 10,000 apartments that will be built in the seaside complex. Prices for most of the apartments will sell for around 3,500 euros to 4,000 euros per square meter. This compares with 4,000-5,000 euros sq. m. for new apartments in the broader Hellinikon area, and more than 5,000 euros sq.m. for homes in parts of neighboring Glyfada, such as golf course.
Even the prices of used homes in Kato Hellinikon, an area that sits on the edge of the new development, are being sold for between 3,500 euros to 5,000 euros sq. meter). Data from agents RE/MAX shows that prices for new apartments in Kato Hellinikon in 2018 reached 4,000 to 4,800 euros sq. meter.
The three-year freeze on a 24 percent VAT imposed on new properties, which is expected to take effect next year, is causing headaches for some property developers. Apart from it offering Lamda an advantage, developers that have recently built apartments in the area have been hit with the tax, forcing them to bump up prices. As a result, these homes are often beyond the price range of foreign buyers, that have been snapping up properties along the southern seaside coast. Those who buy a new home in Greece that will be used as their main residence are exempt from the 24 percent VAT rate.
Investors and real estate officials are waiting for more information on how exactly the growth measure will be implemented. The most probable scenario foresees a freeze on the tax for constructions with a building permit issued between 2020 to 2022. There is also the possibility that the exemption will apply to homes with a 2019 building permit, in the event where construction work has yet to begin.
Based on conservative estimates, Lamda expects to sell 500 apartments per year as its targets foreign investors amidst strong demand for homes on the Athens Riviera and Greece's residency-for-investment scheme, known as the Golden Visa.