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Get ready for a 'fire sale' of Greek islands

The Greek flag flutters in the village of Meyisti on the Island of Kastellorizo, Greece, July 4, 2015. It was on this island, that former Prime Minister George Papandreou announced in 2010 that Greece required a rescue package. If a 'No' in Sunday's referendum eventually takes Greece out of Europe's single currency, any REUTERS/Cathal McNaughtonThe Greek flag flutters in the village of Meyisti on the Island of Kastellorizo, Greece, July 4, 2015.

Property agent Knight Frank is predicting a “fire sale” of Greek islands over the next few years.

The upmarket property company says in its latest Islands Report: “As the long-term ramifications of Greece’s financial bailout play out more fire-sales of Greek islands are expected.”

Last year Greece introduced its first ever tax on real estate under pressure from creditors who wanted it to raise more cash to pay down debts. The tax made owning a private island suddenly unaffordable for some owners — the asset rich, cash poor problem.

Around 20 Greek islands were put on the market last year and Knight Frank expects more to follow as the implications of the property tax begin to hit home for more owners.

The latest Greek bailout deal reached Monday imposes more austerity on Greece, which is likely to lead to a further squeeze on private wealth. Given Syriza’s hard-left leanings, fiscal consolidation will likely hit the rich more heavility than it previously has.

Knight Frank notes that Greek islands will likely attract “bargain hunters” and foreign investors are already turning to Greece to hunt out good property deals.

The Independent reported on Saturday that Russian, Chinese, and even Serbian and Bulgarian investors are buying up discounted properties.

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