Greek property prices slump
Andy Cornish: May 2014
Photo: Emre Kanik
Never a better time to buy holiday home.
There may never be a better time to for holidaymakers to buy the holiday home of their dreams as Greek property prices take yet another tumble. The Greek island property market remains deeply depressed with house prices still falling after almost six years of decline, demand remains weak and construction is at a virtual standstill.
Almost all cities and Greek island resorts have suffered house price falls as the Greek economy continues to struggle under the burden of international debt.
In capital of Athens, Greece's largest city, the average price of an apartment plunged by nearly 10.9% last year while house prices dropped more than 4.2% in the final quarter of the year.
In Thessaloniki, the second largest city, house prices dropped 7.0% and in other cities residential property prices plunged 8.2% while other areas such as the Greek islands they dropped by 4.6% on a year earlier.
The number of residential property transactions plunged 23.1% in 2013 to 23,801s, according to the Bank of Greece while new home being built dropped by 28.3%.
In a bid to revive the ailing housing market, the Greek government recently offered residence to non-EU investors purchasing or renting property worth over €250,000, similar to measures in Hungary, Spain and Portugal.
Before economic problems struck Greece was enjoying a boom in house prices. After the 2004 Athens Olympics the demand for second-homes and holiday villas soared.
Real estate agents reported 30% to 40% annual price rises, especially for properties near the sea and with the boom came better roads and improvements in building quality.
Just like Spain, the house price boom in Greece ended with the global economic crisis. Financing for house purchases dried up with the credit crunch and the recession in UK and Germany, the biggest tourist market dampened demand.
Although the drop in prices should make investments seem more attractive, it is not the bargain it first appears. House prices in Greece almost doubled from 2000-2007 and the latest falls could be seen as a correction to a house price bubble.
Forecasters say house prices in Greece and the Greek islands are unlikely to recover in 2014 as mortgage lending remains tight and oversupply makes for poor investment opportunities.
There are still thousands of properties for sale in the Greek islands, notably on Crete and on Rhodes, Corfu, Zante, Kefalonia, Naxos, Paros, Mykonos and Spetses.
So those looking to cash in on the Greek property slump and buy up a holiday home will have to move quickly.
According to the latest Overseas Guides Company Quarterly Index, overall enquiries for the year rose 33% on 2012, with growth driven by European holiday destinations.
Although Italy and Portugal were the star performers in 2013 with property enquiries up more than 40%, they were closely followed by Spain and France, both up 30% while Greece and the Greek islands saw interest rise by 22%.
Experts say the buoyant UK market, cheap euro mortgages and good finance deals available from developers will all help to push up interest in buying home in countries like Greece and interest is expected to strengthen in 2014.