Foreign Buyers Drive Real Estate Market

However, the increase of tourism to Greece, the expressed foreign confidence in the economy and favorable press reviews are certainly changing the climate. Characteristically the readers of Travel + Leisure magazine voted Santorini as the most beautiful island in the world. The Guardian also noted the contribution of the tourism sector to the resurgence of the Greek economy noting that Athens hotels are registering an increase in bookings of 25% in the first five months of this year, noting the creation a year ago of Marketing Greece for the novel promotion of Greek tourism.

Greece is also showing up strong in terms of the most popular destinations, with Santorini in fiirst place, Crete in third and Mykonos in fifth place, while Capri is second and Sicily fourth.

This positive climate also affects the real estate market, with realtors inundate by requests for information. The interest is also peaking for the so-called “small” Cyclades like the islands of Iraklia, Donousa, Shinousa, and the Koufonisia islands. As one realtor noted, on Naxos buyers were 100% foreign, with Germans also reappearing on the market after many years.

Foreign buyers want lots of at least 4,000 square meters in size in order to build, while prices hover at 2,500-3,200 euros a square meter. On Naxos, the areas of Mikri Vigla and Orkos are most popular. During the first moths of the year, 17% of all sales involved foreign buyers, of which 50% were from EU countries. In the Cyclades island chain all sales involved foreign buyers. Of these 63% bought property worth up to 100,000 euros, while 11% bought luxury homes.

In the Cyclades, according to Alpha Urban Real Estate, there is a slight interest in building new homes by foreigners, especially in areas with nice views. New building licenses have dropped by 80%, while value has dropped by 40%-50% relative to 2008. The drop in lot prices is around 50%, with little interest shown. On Santorini this drop is to the tune of 20%-30%, around 3,000-4,000 euros per square meter in the expensive areas, while on Mykonos the drop in home prices is over 40%, meaning 3,000-4,000 per square meter.

On Crete there is an increase in interest from Russians, but buyers are asking for prices 40% lower than what sellers are asking, believing the market will recede further, while Chinese buyers are interested in larger tracts outside city zoning. Two hotels were picked up by a new hotel chain for 44 million euros, while TUI tourism colossus is interested in property on the island.

Prices are projected to fall by up to 15%, while interest for property on Crete focused on urban flats with prices not exceeding 170,000 euros.

A survey by the Proprius firm shows heightened interest for property on Ionian islands, bolstered by the entry into the market of celebrity buyers.

However, a survey by F.V.A.T. Advisor shows that prices are dropping in the Peloponnese but at decreasing rates and notes there are great margins for improvement because of large infrastructure investments in tourism projects. Generally however, prices have dropped by 30%-40% in most areas of the Peloponnese.

In Attica, many holiday homes have actually become main dwellings to cut costs, with local residents selling at rock bottom prices for a fifth consecutive year, with most interest focusing on the eastern coast of Attica (Rafina, Nea Makri, Porto Rafti, Agia Marina, and Anavyssos). However, this year, speculation on the Attica real estate market is expected to pick up significantly with 30,000- 50,000 seaside homes being on the market.

The Chalkidiki peninsula is also registering a price drop of over 50%, but is expected to pick up as Russian interest will become substantive.

Most foreign buyers are looking for property under or close to 100,000 euros (56%), but there are those that are looking for bargains in the luxury market (22%). Chinese buyers are looking mostly (65%) for property worth between 250,000 and 450,000 euros, while 25% for property worth between 500,000 – 1,000,000 euros, and 10% interested in property over that range. Arabs are mostly looking for property worth over a million euros, mostly in Attica, Mykonos, the Dodecanese, and Crete. Russians are searching for country homes, mostly in the mid price range and are interested mostly in Chalkidiki, but also on Crete, the Peloponnese, and Mykonos. Europeans, like British and French citizens are interested in smaller dwellings, but are waiting for prices to drop further. Many German buyers are opting for abandoned dwellings that they can refurbish.