46th Congress of the European Regional Science Association: "Enlargement, Southern Europe and the Mediterranean", August 30th - September 3rd, 2006, Volos, Greece
It is generally considered that property is by far the largest store of wealth, and development economics suggests that property markets are the bedrock for economic development. Countries make efforts to promote national and international real estate investors and enterprises. Real estate markets are mainly organized by the State through institutional frameworks and practices. In this paper, we focus on the reasons for real estate market low transparency and effects on tourism investments in Greece through a systemic analysis of the property development process. National or international real estate investors encounter an unfamiliar environment in which they find themselves in a difficult position due to low real estate transparency. Specifically: - Absence of financial benchmarks; - Lack of historical or current market statistics; - Financial statements of listed vehicles that are neither detailed nor standardized according to International Accounting Standards; - Urban, regional and environmental planning procedures and codes that are not clear; - Situations where local assistance or under-the-table payments are required to navigate the investment/development/management process; - Lack of title insurance; - Environment in which government or public utilities change urban development status and regulations, introducing risk. Tourism is considered by the Greek State as the most promising economic sector of the country. Tourism Development Co., created in 1998, is a state-owned company that has undertaken to develop and revitalize the assets owned by the Hellenic Tourism Organization located in the most privileged sites of the country (large land plots for development, casinos, marinas, hotels, health clubs, etc.) by the mobilization both of international and national funds. Tourism Development Co, as a State-owned company, is a relevant case to study State transparency, real estate market transparency and international investors' attitudes and practices, through examining specific projects of property development and privatization.