The Greek Holiday Home Market: Current and Future Trends

A buoyant market on a human scale

Since the Greek property market opened to foreign buyers in the early 1990′s, thousands of holiday homes in Greece have been coveted -and ultimately purchased– by British, German, and other western European buyers. During the same period, the Greek property market has enjoyed steady growth rates of 8-12%. The Greek economy is, notably, one of the fastest-growing in the euro zone; and, thanks to the country’s stable and predictable economic growth, the real estate market can be relied upon to grow at a realistic pace as well, rather than in extreme upswings and drastic downturns all too often seen in up-and-coming markets.

Though pocket change is hardly enough to buy property in Greece, holiday homes here are, by comparison, still an excellent value for overseas buyers in search of that ray of sunshine and the downtempo lifestyle that goes with it. These are available in abundance; in fact, Greece is the perfect alternative to the traditional Mediterranean “favorites”: it is accessible, safe, beautiful, loaded with character, and prices in like-to-like comparisons of Greek and French or Spanish property can be up to 50% lower. There is a large variety of holiday homes for sale, but massive residential developments are not the norm. In most cases, summer homes in Greece retain their local style since, as a rule, the most sought-after locations for second homes are the islands and smaller villages where because of building rules, properties built are in the local traditional style. And, for supporters of “green” architecture, the sublime climate in Greece provides the perfect grounds for bioclimatic structures, maximizing the benefits of sun and breeze to create energy-efficient, sustainable homes with reduced maintenance costs.

Since a significant percentage of holiday home buyers originate from Western Europe, it comes as no surprise that a lot of new construction is customized to suit these buyers’ preferences. The concept of homes that are “ready to wear” has caught on, as travel times between Greece and the rest of Europe have diminished and popping over to Greece for a weekend is no longer utopian; fully equipped homes, sold turnkey with everything from furnishings to linens and cutlery sets, ensure that the fortunate owner can spend all weekend by the pool rather than curtain-shopping for the house. Similarly, the concept of Buy-to-Let properties is taking shape; while property management and guaranteed rentals are in an early stage of sorts, they are increasingly available in, primarily, tourist-savvy locations. This is an important feature, considering that holiday homes usually belong to absentee owners wondering how to make the most out of their investments while, at the same time, enjoying the peace of mind that comes with knowing their property is looked after while they are busy working to fund it.

It is rather unfair that Greece, one of the most mountainous countries in Europe, has settled in people’s collective conscience strictly as a Sea-and-Sun destination. As a result, the overwhelming demand by overseas buyers is for summer homes, with seafront properties carrying the respective price tag and giving credence to global real estate’s “Location, Location, Location” mantra. Still, inland traditional and newly-built properties abound and they are an excellent alternative for those who can’t afford a seaside property, but don’t mind driving to the beach and yearn for an insider’s take on the famously relaxed village life. After all, even on the larger islands, the beach is never too far away.

What’s next?

Is this buoyant market heading for a plateau anytime soon? Well, as in most situations, the answer is “It Depends”. At the moment, Greece is basking in the limelight. The 2006 tourist season ended with a record number of tourists visiting the country (an 8,5% increase compared to last year, according to The Economist), a promising statistic after a slower tourist influx in the previous couple of years, and despite the lack of any long-term marketing campaign on a national level. It is imperative that Greece waste no time capitalizing on the momentum generated by the very successful 2004 Olympic Games and the subsequent, priceless, visibility abroad. Furthermore, developments in Greek Real Estate are teeming with promise. Demand for holiday homes is expected to outnumber supply, keeping property prices rising, and real estate professionals expect holiday home prices to increase up to 10% over the next few years. It is no coincidence that so many large development companies with solid track records in commercial and urban real estate have delved into holiday home projects; their high quality developments with a western flair in select locations aim to attract discerning foreign buyers and investors.

Improvements in infrastructure and construction, largely because of the 2004 Olympic Games, have been tremendous. Thanks to new transportation and road networks, travel times have diminished and previously remote areas are within reach. Soon to be completed is one of the largest road construction projects in Europe, the Egnatia Motorway in northern Greece; a gateway to southeast Europe and the Balkans, it will provide a quick East-West link. Other significant developments with a favorable impact on the Greek holiday home market include:

A nationwide Land Registry in progress which, upon completion, will greatly simplify the home buying process

ADSL / Broadband internet connections are now widely available and enable individuals to conduct business away from home

Mortgages with low interest rates are also widely available to both Greek and foreign buyers

Improvements in the leisure industry, such as golf courses, which are gaining in popularity and becoming the highly marketable focal point of many new developments
Naturally, all that glitters is not gold. Newly introduced taxation laws (Capital Gains and/or Value Added Tax on select properties) may, according to some, have a deterrent effect on property purchases; whether or not this will be the case remains to be seen. Also, Greece must keep working to remain on the map of competitive Mediterranean real estate. The truth is that with the exception of a marketing campaign around the time of the Olympic Games, Greece is unfortunately not advertised enough, however the country’s list of charms is long:

Clean, beautiful beaches
A perfect 4-season climate
Low crime rate
A stable economy and long-standing EU membership
Lack of internal strife
Ancient history and a world-renowned culture
An all-around very high quality of life
Untapped potential of winter tourism
An overseas homebuyer usually visits Greece, and first falls in love with it, as a tourist. More tourists equal more homebuyers -it’s a simple logic.

Just as important, on the service level, is the need for integrity and professionalism. The real estate sector is no exception. The estate agent’s experience, professional affiliations, and language / communication skills (especially for foreign buyers) are of key importance for a painless, fruitful homebuying experience. The good old “word of mouth” way of finding a reliable estate agent is still, probably, the best way. The Hellenic Association of Realtors, the only official body recognized by C.E.I. (the European Confederation of Estate Agents), is another recommended starting point. After all, for most of us buying a home is the purc

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