This interview given by Antonis Markopoulos, co-founder and CEO of Prosperty to Mary Papakonstantinou of newsit.gr, focuses on the prospects of real estate during coronavirus and development opportunities for startup companies.
What are the market gaps that Prosperty fills?
Prosperty is an innovative online real estate trading platform that brings transparency to transactions and enhances the user experience. It puts an end to the time-consuming and costly processes that have always plagued the real estate market, which on the one hand were due to the complete lack of technology in transactions and on the other hand, to the presence of intermediaries. Featuring speed, reliability, transparency and efficiency, the Prosperty platform is said to offer complete digitized transactions and minimize or eliminate the need for physical presence when buying and selling a property, which is nowadays very important due to COVID-19.
How did the coronavirus pandemic affect your business plans?
The pandemic practically accelerated our business plans, as it highlighted the urgent need to provide digital and remote services, in every dimension of economic activity, including the real estate market. In the post-coronavirus era, the Prosperty platform aspires to lead the digital transformation of real estate and be the ideal tool for homeowners, buyers and tenants by enabling them to digitally manage many – if not all – stages of buying and renting real estate without their physical presence being necessary.
After a long period of decline in the real estate market due to the financial crisis, how do you think the prospects in real estate are shaping now?
In the last two years, the real estate market in Greece has seemed to recover from the ten-year recession and has attracted investors mainly from abroad. For example, there has been great interest in buying holiday homes, which is a highly lucrative sector in our country. However, the multilevel crisis we are experiencing due to COVID-19 has slowed this upward trend, since, among other things, it caused an unprecedented insecurity in travel. The consequences of this peculiar situation will be clearer in the second half of this year.
Which are the properties that attract the most interest?
The decline in demand for Airbnb short-term leases has increased the availability of medium / long-term leases in Athens and Thessaloniki and has recently dropped the prices. This will continue as long as tourism remains low. However, the temporary pressure on rental prices is not expected to lead to a significant diversification of capital values in the long run. Rental prices on recently renovated properties will remain high, since, as mentioned above, demand for such properties remains high mainly from young people, young couples and families. In any case, the projected decline in growth rates always pulls down the sales prices, but for now the general assessment is that high-quality properties, in areas of high investment interest, both residential and commercial, are not expected to be significantly affected, depending of course, on the time required to restore normalcy.
How would you describe the sale and rental prices of homes and offices?
In terms of sales, the residential real estate market remains at satisfactory levels despite the uncertainty of recent months, as we observe a normalization of both supply and demand, which is expected to normalize further in the next period, gradually regaining the previous equilibrium. In addition, given the successful management of the situation by our country, we observe a strong resurgence of investment interest from abroad -and especially from Greeks abroad- both in the holiday home market on islands and holiday destinations as well as investment opportunities focusing on Athens and Thessaloniki.
In the area of rentals, there is a shift from short-term lease of furnished houses to medium-term rent. Prosperty is present, as it is ready to welcome and serve this need of short-term rental owners. Finally, there is a significant shortage in the market, in relation to the demand, for recently vacated renovated apartments in large urban centers. And considering this, we at Prosperty are preparing a new service to fill this big gap in the market. As expected, the uncertainty due to the pandemic multiplied, affecting to a greater extent the commercial real estate and especially the shops and the restaurants and entertainment places, in which the final impact of the crisis will be visible at a later stage. We are interested in observing whether any permanent changes that may eventually lead to the adoption of new working conditions and its impact on the real estate market will be verified. Such as, the possibility of increasing demand for larger real estate, if continued and significantly established practice of social distancing and the possibility of increasing demand for real estate or land in more remote suburbs or even outside large urban centers.
Empirically speaking, what are the difficulties for a Greek startup company? Do you think that relocating abroad is a good solution for Greek companies that find it difficult to survive in an unfavorable tax environment?
Apart from the business risk, startups in Greece are faced with difficulties disproportionate to their size. One of the main problems they face is the large tax and insurance charges, especially during the start of their operation. It is also difficult in some cases to find and retain talent, especially in the field of technology. Young people usually choose to pursue a career abroad, as in other countries the motivation is greater. In addition, the pandemic has brought new upheavals for start-ups, making it difficult to access funding for many startups and causing them a viability issue. It is a positive thing that many young entrepreneurs remain in the country and start ambitious business ventures in demanding industries such as technology, which can create job vacancies and add value for the economy.
Again, as for startups, how do you think the State could contribute to their development?
Initially, we believe that a significant reduction in tax rates and insurance contributions, especially in the early years, could strengthen the effort of startups and their prospects. In addition, the simplification of legal procedures for the establishment of companies and access to finance through the provision of tax incentives to angel investors as well, in proportion to the degree of maturity of each company, are essential factors in strengthening startups.
“Reduced demand for short-term leases has increased the availability of real estate and dropped their prices. However, prices on recently renovated properties will remain high due to high demand.”
About Prosperty, how did the idea come about?
The real estate market is one of the few industries that has failed to modernize in recent years, despite rapid technological development. The idea for such a service is not simply due to the current pandemic, but is based on the frustration of most interested buyers or tenants, when they come across the volume of bureaucratic obstacles and the complexity that accompanies every transaction in the real estate market. It usually takes a considerable amount of personal time to complete a process that should normally be a pleasant experience. Most people who have been involved in the sale, purchase and rental of real estate have experienced the hassle, poor service and cost ratio with questionable end results. This traditional way has no place in today’s digital age. So we thought of creating a reliable digital platform that would bring transparency and data accuracy, as well as speed, efficiency and enhanced trading experience, essentially changing the way we buy and rent real estate. through Prosperty, one can rent or sell their property while relaxing on their couch!
What are your goals for the future?
Prosperty invests significantly in the continuous development of innovative technological solutions, data analysis, customer service and communication and aspires to become the main channel for buying and selling real estate in Greece, constantly presenting new services to its customers. Along with the B2C market, Prosperty is intensively preparing to offer similar services as well as integrated real estate management services in the B2B market, to institutional investors and real estate management companies, that manage a large volume of real estate linked to requirements (non performing loans). We are already in advanced discussions for the management of a real estate portfolio by such investors ready to be made available to the general public. At the same time, by proving our business model in the domestic market, we will accelerate the expansion to future countries in 2021, both in neighboring countries and in Central and Eastern Europe, where the markets there face common challenges, complexity and corresponding bureaucratic problems, but at the same time there is strong investment interest from institutional real estate investors for both commercial and residential real estate.