Buyers biding their time
Bargain Greek homes could get even cheaper with no upturn in sight, writes Peta Tomlinson
Vultures - of the avian kind - are opportunistic predators. They can sniff out potential prey from more than a mile away, and will hone in and circle it until satisfied that the time is right to strike.
Bargain-hunters circling the Greek property market are finding plenty of fodder. With the troubled Mediterranean nation now into its fifth year of recession, prices remain on a downward spiral, losing a further 10.1 per cent in the second quarter of this year across apartments and houses nationwide, according to the Bank of Greece. But with no sign of an upturn, buyers seem content to bide their time. Transactions are down by half this year, according to the bank's data.
Andrew Langton, chairman of London-based realty group Aylesford International, believes bargain-hunters can sense further falls. "I suspect the vultures circling the Greek property bargains are waiting to hear whether there is any chance of the return to the drachma before they commit to investing on any scale in Greece. Much depends on whether the Greeks default on their interest payments and how they survive what could be a very bleak winter," he says.
Sales tracked by the Global Property Guide show prices in Greece have been on the slide since 2007-2008, when the market "came to a grinding halt" due to the global credit crunch. The shock was felt more deeply because it came on the back of double-digit growth, with annual price increases averaging 13 per cent in 2005 and 2006 - and up to 40 per cent in seaside resorts such as Crete - before the brakes were applied.
Anecdotally, some agents are reporting renewed buyer interest as the year progresses, but not everyone agrees.
Roi Deldimou, branch manager at Beauchamp Estates Mykonos, says bad economic news plaguing Greece has brought overseas bargain-hunters out of the woodwork.
"It is true that the financial crisis in Greece has opened a new market for international investors, as they see the opportunity of buying in lower prices. The truth is that the prices went down in a range from 20 to 50 per cent depending on the overall value of the property and the location," Deldimou says.
"Real estate on the mainland is suffering the most. The Greek islands are in a much better position, as they are desirable for everybody in the world. We receive daily more and more inquiries from international buyers for holiday villas."
She adds that this is the first year since the downturn that the market has become active again, "with sales despite the situation". "So people are not fishing anymore - they are determined to grab the opportunity and buy lower, and it will grow more."
Little if any of this interest is coming from Asia, Deldimou says. "Asians are visiting as tourists but, in general, they are not looking to buy as they are quite new to Greece and they are still exploring the country."
Aylesford International founder Andrew Langton describes those buyers who do commit as "a mixed bag, but probably Greek expats are predominant in seeking most opportunities. The Brits, particularly on Corfu, are always very active buyers. [There is] no sign of Chinese/Hong Kong nationals".
Spyros Mantzos, managing director of www.apropertyingreece.com agrees that sales are up compared with a year ago. He notes that foreigners are cash buyers - "as it is currently almost impossible for foreign buyers to get a mortgage" - so they would not appear in the Bank of Greece figures.
Such buyers are hunting on the islands, and "yes, they are after the bargains", Mantzos says. "Asking prices have reductions on average 30 to
50 per cent off the prices of three to four years ago. Also, the euro has reduced against many currencies so the deals are even better. It is a buyer's market but many people have decided that valuations are now attractive for buying."
Mantzos has been fielding inquiries from Hong Kong and mainland investors for the first time this year, he says, after a law was passed making it easier for non-Europeans to buy property in Greece.
Apart from low price, Mantzos asserts that Greece is popular because it is safe. "The video of Athens on the news is totally different from the rest of Greece," he says.
"There are very strict regulations against too much building, so most properties are small villas, as apartments are not allowed outside main towns and village centres."
Popular areas are Crete, Corfu and the Peloponnese, he says, where a two-bedroom detached villa with pool on its own plot sells for about €120,000 (HK$1.21 million). At Paxos off the southernmost tip of Corfu, Aylesford International has land which was launched a year ago at the original asking price of €750,000. It has now been reduced to €525,000 and is still open to offer.
Regardless of the strife afflicting Greece, Langton says one thing remains true: the property hot spots "will always be the sea fronting properties of Mykonos, Spetses, Hydra, Porto Cheli, Cephalonia and Corfu".
It could be argued there are many reasons to wait and see when it comes to Greece. Langton can see both sides: "The pros for buying a sea front property are that it is still a paradise compared to the equivalent location in Southern Spain or any of the massively overpopulated coastal towns in France and Italy. The sea is much cleaner, there are endless islands, wonderful sailing, and a relatively small population of 11 million people.
On the other hand, there is Greece's poor economic situation, "and the recent civil unrest may prove to be a worrying example of what we can expect in the future".
- Greatly reduced prices
- Mediterranean lifestyle
- Wide choice of coastal locations
- Market may not have bottomed
- Difficulty in obtaining finance
- Poor economic prospects
What you can buy for ...
Two-bedroom furnished villa of 85 sq m in southern Crete, with private garden and room for pool.
About US$1 million
A 101 sq m luxury property in the island of Santorini.