Greece's formal acceptance in Monetary and Economic Monetary Union (EMU) as the 12th member earlier this month is expected to have significant developments in the property market.

According to a number of realty offices in Athens, the rate at which the drachma will be fixed as of January 1, 2001, will have immediate repercussions in three essential areas of the real-estate market.

The country's entry into the euro zone will bring about lower interest rates; is expected to increase the interest of activities of Greeks and foreigners to invest in residential and commercial property; and bring about the decrease in property tax.

Interest rates: Despite the substantial drop in interest rates in the last few years, the interest rates on mortgage loans in Greece continue to be higher in comparison to other countries in the European Union. Greece's entry into the EMU will mean that interest rates will have to become harmonised with the rest of Europe.

The property market is expected to boom with this development. "With a further drop in interest rates, a new homeowner will pay the same mortgage equal to a high-rental home."

Investments: A stable exchange rate is expected to attract even more foreign investors, namely those involved in the banking and insurance sectors. Realtors predict that the greatest interest will be in property which can be developed into entertainment parks. Tax: Today, property is burdened with dozens of different types of tax, making the transfer of property difficult. The harmonisation of property taxes with the European model is expected to contribute significantly in the development of the real-estate market, increasing the interest of not only Greeks but also foreign investors.