We sat down with our co-founder Gal and talked about new constructions in the city, why we see so many of them now and what that means for the real estate sector.
Q: How do new constructions in the city influence the real estate sector?
A: First, let’s understand that with new construction we generally refer to the development of the city. New constructions can range from building a metro station to changing the existing airport. But they can also refer to renovations, building new hotels and apartments.
When we notice that there is indeed something developing in the city, we check
the reason behind the development. So, in other words, why does it take place? Why are they improving the roads of the city for example? Are they trying to make the quality of life better for the locals? Are they working on improving the tourism sector? Because usually any changes are done with a particular reasoning behind them.
Especially in Thessaloniki, the quality of life of locals and the tourism sector are at the forefront when it comes to making changes and improvements. The development of the new metro and the airport constructions for instance are both improving the quality of life for locals and altering the experience of tourists when they visit Thessaloniki. From the moment tourists arrive here they will have a totally different experience compared to 8 years ago. They will arrive at a much better airport facility, use the metro to reach their hotel destination etc. Also, there is so much more to do in the city nowadays. From new shops to restaurants, Thessaloniki offers so much more that tourists have the choice to stay 3 -4 days longer than they would previously. This means that a much more significant amount of money stays in this place and increases the investments. Which ultimately leads our company and our overall sector to grow and expand.
Q: So, the tourists who visit the city and spend more days and money here, have a positive effect on us?
A: Yes, of course. Now that the tourist sector has recovered and even surpassed the numbers of the past, we see an increased amount of money flowing into the city. Any tourist that comes here and visits various shops, restaurants, bars etc. will leave money behind that will boost the local economy of Thessaloniki. That’s why we see so many new shops opening, individuals taking initiatives and trying new things, events, constructions, you name it. We can observe a rise and growth.
I remember I used to walk around neighbourhoods and saw closed shops and unused properties. There was a general stillness. Now, I walk past the same neighbourhoods and I notice that for example a lawyer has opened a new office, or there is a new store celebrating its opening. This means that the money that flows into the city from foreigners boosts the locals’ financial situation so that they in consequence start thinking about investments and growing businesses etc. It’s all like a chain reaction that will affect Thessaloniki’s development over the next 3-4 years.
Q: Is this growth that we are observing in Thessaloniki, and Greece in general, coming from foreigners and foreign investments only? Or are the locals a part of it?
A: Of course, the money that came to Thessaloniki, especially during the crisis, only came from abroad. If we take our company as an example, Progreece, we started here as foreigners. But we only work with locals. Our constructors are Greek, our lawyers are Greek, our notaries, our employees…everyone one of them comes from here. So, even though we are foreign investors we work with local people and in the end, they also become a part of this growth and can partake in it. Be it in the form of higher wages or increased opportunities that show up.
So yes, I believe that even if the money comes from foreign investors, it does eventually have an impact on the local population. This money stays in the local economy of Thessaloniki, boosts the financial situation of the residents and can ultimately be used for increased initiatives and new business ventures. Maybe so far this chain reaction I am talking about is not highly visible, but it will be in the coming years. And locals will start feeling the change more and more.
Q: Now that you mention it, I have seen so many new shops and people in the city lately. Compared to when I was here as a university student, where there were few to no tourists, things seem to have changed for the better. I notice more tourists and events happening. Thessaloniki is appearing to be more alive in general.
A: Of course. That is also what we were looking for when we first started as a company. We may have come here at a time when there was no economic growth, but we knew that there is potential for change. We also had done our research before that and had found out that the Municipality of Thessaloniki was working on a plan called 2030. One of the goals of this plan was to develop the tourism sector of the city. Not just in numbers – which has increased obviously- but also in the length of the period people choose to stay here. So, basically what I mentioned before. The happening of more events and the opening of more stores/cafes are giving tourists more reasons to enjoy a longer time here and book an overall longer stay.
Also, things like Hollywood movies being shot here aren’t coincidental. They are occurring time and time again because they are part of a bigger plan and strategy to develop the city and its potential to boost the economic growth of the city and its residents alike.