By Mike Saunders
The political uncertainty of the ‘will they won’t they go back to the drachma’ situation caused UK buyers to disappear and the property market in Greece ground to a halt.
In 2020 there were 103,865 new houses built in Greece, whereas in 2024 less than 20,000 were constructed in the whole country. Developers went to the wall, builders were left with nothing to build and estate agents shut their doors. Thankfully there wasn’t the huge property bubble like in Spain, so prices didn’t drop like a stone, instead they remained relatively stable.
But the fortunes of Greece may well be changing. In light of the record breaking 17 million tourists travelling to Greece this year, the Greek government is pushing for a reduction in VAT at restaurants from 23 per cent down to 13 per cent. It is felt that this will encourage even more visitors – it all points to the government taking a more pro active view of the country’s economy.
And that confidence is also now returning to the property market. Buyers are beginning to look over the parapet again. Seeing the potential of increased traffic to Crete, which accounts for 85 per cent of overseas investments in the Greek property market, Ryanair have created a ‘hub’ at Chania Airport in western Crete. With a scheduled service also provided by EasyJet, there are now 17 direct flights a week to Chania from eight different UK airports.
While there used to be the syndrome of ‘borrow against the equity on your house’ to fund a holiday home in the sun, today’s buyers are somewhat different since the economic meltdown. They are older – around sixty – looking to make a permanent move, either now, or when they retire in a few years time. Buyers want the privacy of small sites – no large scale developments – plenty of storage and low cost living, comfort with minimum maintenance. They also want to know exactly what the whole purchase cost will be. Buying a home in the sun is a huge investment in trust and buyers want to feel they are being supported every step of the way.
The vast majority of buyers from the UK have a budget well below £200,000, with the most popular property type being a two bedroom detached house. In Crete, this means around €140,000 plus purchase costs, taxes and fees of around 12 per cent.
Around 70 per cent of buyers rely on a pension, savings, investments or a mix of these, on which to live. With a month’s supermarket shop of €300 or so per couple, an income of £1,000 a month will get you a far better standard of living than in the UK – and there’s the added benefit of 320 days of sunshine a year and no freezing cold winters to endure. In the UK, with heating on for nearly eight months of the year, the cost can be crippling. On the island of Crete you will not normally need any heating on during the day until late afternoon and then only during December through to March. If you have a solar water heating system installed providing free hot water for most of the year, and you consider there’s no council tax to pay, it’s easy to see why owning a property in Greece offers a really affordable lifestyle.
Unlike the UK, in Greece it is important to realise that buyers have to pay an estate agents fee of at least two per cent. On a typical two bedroom house that can cost you the best part of €3,000. With build standards being raised, a typical resale will not be built to the same levels of construction and comfort as a new build.
Mike Saunders is a Greek property expert from Western Crete property developer Snobby Homes.
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