The economic impact of COVID-19 in Crete
Due to the government restrictions caused by the Corona Pandemic, Greece as a whole is already facing a profoundly changed economic situation. Company closures and thousands of new unemployed will lead to a recession in 2020. As the pandemic spreads again, conferences and events across agriculture, tourism, technology and sports are being cancelled or postponed.
Travel bans on visitors from high-risk countries, like Italy, the UK, Sweden and Spain and quarantines for international visitors and Greek nationals returning from abroad, have had a huge impact on the tourism industry in Crete.
According to the Greek Reporter, the number of tourist arrivals and revenue from tourism in Greece has taken a dramatic plunge due to the Covid-19 pandemic, with June revenue decreasing by 97.5 percent, as Bank of Greece data shows.
Specifically, there were only 256,000 arrivals in June (a 93.8 percent drop) corresponding to 64 million euros in revenue, a 97.5 drop compared to June 2019. Tourism revenue for the first half of the year was 678 million euros, showing a 87.5 percent decrease compared to the first six months in 2019, when foreign tourism revenue reached 5.41 billion euros.
While the monetary impact on the travel and trade industry is yet to be estimated, it is likely to be in the billions and increasing. Moreover, in a time where new or stricter measures are being taken by the Greek government every day to fight the virus, it is hardly possible to assess the scale of the impact. But one thing is certain, the effects will also have a short-, mid- and long term impact on the Real Estate Market of Crete:
- as the The MSCI Greece Index has recorded strong fluctuations with historical lows
and brings uncertainties to real estate investors,
- as banks are cutting key interests rates even more sharply and the mortgage rates increase,
- as social activities have been shifted because of the pandemic, new criteria requested from the potential buyers (space, size, access, fresh-air systems)
- the pandemic has caused a great deal of uncertainty, making macroeconomic forecasting for short-term rental properties (commercial or residential) a challenging task