Real estate has always been a popular topic for everybody.
Whether I am having coffee with friends or on the phone with an overseas client I am always asked about the status of the property market. I reckon it is a legitimate interest as most families’ savings are, or will be, in the form of real estate.
There is no doubt that the real estate market has always been the barometer of the “real economy”. It is where demand and offer are continuously confronted “live”. What happens on the battlefield of the property market is shaping trends much before they are registered in the newspapers’ headlines.
Lately, there has been a renewed interest for the Greek real estate market, especially for second homes. Quality properties are now more affordable than ever. Spectacular homes with stunning views, seafront villas in pristine locations or country homes immersed in olive groves dating back to ancient times make Greece’s property market one of the most appealing and fascinating in the world.
Below you will find the top five questions that I come across nearly every day!
1. What is the current situation in Greece?
The country has achieved a remarkable recovery, turning a 15% GDP deficit into a 3 billion surplus, the first in 40 years of Greek economic history. A few days ago, the country made a successful return to the bond markets selling at 4,95% 3 billions of Greek bonds subscribed three times.
Various sectors of the Greek economy are back at pre-crisis levels. In the case of tourism, figures are even better. 2014 is expected to be another record year as more than 18 million tourists are expected to visit the country. Our famous shipping industry – we have the largest commercial fleet in the world – has also regained competitiveness, further boosting our economic rebound.
2. What are the real estate market conditions?
Property market conditions in the second homes front are steadily improving. Although we are far from the last peak of the market in 2007, the outlook is promising. In our target countries, consumer confidence is returning, and this is reflected in a renewed interest in buying a property in Greece.
Property sales figures for 2013 are on the rise. It is the third consecutive year of positive growth – a further sign of rebound in the property market following four years of recession. Our figures confirm the general trend for second home sales in Greece and its islands.
The momentum is likely to accelerate, as a series of important structural reforms have improved the competitiveness of the Greek real estate market:
– a reduction of the transfer tax to 3% from a previous 10%
– a European Residence Permit for non E.U. citizens when they buy a property of at least € 250,000
– the legalization of buildings not in conformity with planning regulations
– the full compliance to the building regulations of all properties prior to the sales’ contract.
3. What about the prices?
Following an average drop of 20% over the past four years, prices have now stabilised. But owing to our limited property supply, Rhodes never experienced a house-price boom in the first place. So now our affordable prices make the island an enticing option if you’re looking for a villa in the Mediterranean. Prime real estate is a fraction of the cost of similar locations in the Med.
Today, a five bedroom 230 m2 luxurious seafront villa in Rhodes comes at €1,600,000 – a mere €7,000 per m2, when a similar property in Mykonos is double that figure. And for key locations in Sardinia or the south of France, the price can be upwards of €50,000 per m2.
A three bedroom property with separate gym area, swimming pool and spectacular sea views in Vlicha, near Lindos comes in at a more affordable €3,000 per sqm.
4. What is the future outlook for the property market?
It comes down to a simple balance between supply and demand.
More and more people dream of owning an overseas property. Many of the visitors to the island will want their piece of paradise in the sun, and Rhodes is the ideal place to own a second home, with its modern infrastructure, natural landscape, rich culture and hospitable people.
But property supply on the island is limited. Tight town planning regulations limit new building, and forestry and environmental laws prohibit mass second home developments. What’s more, 25% of the island’s terrain is protected by the directive ‘Natura 2000’. This regulation ensures the preservation of Rhodes’ rich ecosystem for generations to come.
This all means the island’s property is likely to increase in value. An attractive prospect for today’s savvy buyers!
5. What is the profile of your buyers and what are they buying?
Buyers are smarter and more sophisticated these days. They are well-informed, controlled in their decision-making, and quick to move when they see the right property. They expect to get real value for money as well as quality construction. Often, international buyers are pleasantly surprised by the high standards of construction found in Rhodes. And for them, authenticity is very important. Our buyers are not seeking the dazzling lights of Monte Carlo! Today savvy buyers are interested to properties close to the sea, especially on the east side of the island. The romantic ones tend to explore the west side, as well as the medieval city or remote villages. At Rhodes Sotheby’s International Realty we are continuously exploring all areas of Rhodes, and we often discover real treasures away from the popular locations. This is undoubtedly the best part of our job.