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Greece Debt Crisis: Rich Greeks Are Now Keeping a Low Profile

Rich Greeks are keeping a "low profile" as uncertainty reigns in the country.
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Against a backdrop of capital controls, financial uncertainty and increasing material deprivation, displaying wealth in Greece has become a big faux pas. Rich Greeks are keeping a "low profile," business people who work in high-end real estate, hospitality and retail told CNBC, as uncertainty reigns in the country.

After submitting last-ditch reform proposals on Thursday, Greece has a "final" deadline of this Sunday to come to an agreement with international creditors over the reforms needed in return for further financial aid. Failure to reach a deal with Europe by Sunday would make a "Grexit" — Greece's exit from the euro zone — more likely.

Whether or not an agreement is reached, the outcome will be tough on the majority of Greeks, who have already been hit hard by five years of austerity measures. And with more wage and pension cuts being demanded by Greece's creditors, it's little surprise that some have taken to hiding their wealth.

Cars, clubs and handbags

Premium real estate agent Theo Bosdas, who is based in the wealthy Greek seaside town of Vouliagmeni, reported a notable drop in business activity and ostentation from Athens' most wealthy citizens.

"The rich are trying not to over-expose themselves and their wealth to (the rest of the) people. Even driving expensive cars has become a rare instance now," he said.

"Instead of strolling around Kyfissia (a wealthy suburb of Athens) in a Porsche or Ferrari, they will have included in their fleet something more acceptable, like an Audi."

A passerby browses outside a Cartier store in Athens, Greece, on Thursday.Christopher Furlong / Getty Images

For one manager of an exclusive club near Athens, it was last weekend's referendum on the country's bailout program that marked a sea-change among the club's well-to-do clientele.

"In the last ten days, many things have changed — such as the amount of money they spend, how often they go out. It was a shock for us," the manager told CNBC. "Wealthy clientele are trying to keep a low profile," they added, asking not to be identified due to the sensitive nature of the topic.

Property 'nose-dive'

Bosdas, who works in the Athens office of global luxury real estate agency Kensington International, said the uncertainty surrounding Greece's future had put wealthy clients off property.

"We saw a drastic decline last week in contracts that were ready to be signed. We're talking about millions of euros worth of contracts," he said.

Indeed, many people were preferring to rent rather than buy, while they waited to see whether Greece would stay in the euro, he said.

"Some of the most affluent people in Greece have decided to step back and see what happens next…They don't want to expose their wealth to this turmoil," he added.

The recent slowdown compiles a longer term problem. Bosdas said the Greek property market had "seriously collapsed" over the past few years, with the number of property sales per year falling from 220,000 in 2008-2009 to just 15,000. "It's been a nose-dive," he added.

'Almost dead'

With capital controls on Greek banks limiting cash withdrawals to up to 60 euros and the future uncertain, it's perhaps unsurprising that wealthy Greeks are hesitant to splash the cash on property and exclusive bars, restaurants and clubs. Another sector where the wealthy are pulling back is the upmarket retail sector. George Giannopoulos runs two high-end clothing stores in two of Athens' most upmarket districts, Piraeus and Glyfada. He said there had been a marked change in spending habits since the leftwing Syriza party came to power in January, and began its fraught negotiations over reforms with lenders.

"The market has become unstable in a short period of time and there has been a very serious decrease in the last few days," he told CNBC on Wednesday.

"The basic reason for this, I think, is fear. People fear the future and what will happen — what currency we'll have, for example."

He said there was a "very small percentage" of people that were spending money because they were afraid they'll lose it if haircuts were imposed on bank deposits. "But mostly, it's almost dead."

A psychological thing?

Austerity in Greece has been widespread, affecting vast swathes of the population — around 26 percent of Greeks are currently unemployed, and this figure rises to 50 percent for younger people.

And with more tough times on the horizon (the Greek government's latest reform proposals include tax hikes and an overhaul of the country's pension system), Giannopoulos said that average Greeks would judge ostentation harshly.

"It's definitely true that in terms of a car or watch, those are bold statements of wealth — they can be interpreted with hate by others that are suffering," he said.

"It's a psychological thing… Many of our customers have big companies and are being forced to make people redundant. They can't at the same time go to work with a big car, or nice watch or handbag. They must keep a low profile — it's a matter of survival."