Drop in holiday home buyers this year, but rentals enjoy rise

Despite the favorable prospects at the start of 2015, this year has dashed any hopes of a rebound in the holiday home market.

At the end of the third quarter of 2015, Bank of Greece data showed that the inflow of funds from abroad to this segment of the property market declined to 117 million euros in the first nine months of the year, compared to 153.5 million euros in the same period a year earlier. That negative picture is seen to have continued in the last quarter of the year too, given that the majority of interested buyers tend to purchase holiday homes in the summer months.

In 2014 as a whole, the holiday home market had witnessed an inflow of 250 million euros, up 48.8 percent from 168 million in 2013, and up 121 percent from the 113 million euros invested in 2012, illustrating the momentum created in 2014 and lost this year.

Nevertheless, property market experts still highlight that the prospects of this sector remain positive in spite of the adversities of the last few months, mainly the imposition of capital controls in late June that doubtless scared away many potential buyers.

Sector professionals note that while buying interest has subsided, there has been significant growth in demand for renting luxurious holiday accommodation, mostly from foreigners.

According to a survey by Algean Properties, an international property services company with a presence in Greece, that positive development creates a favorable environment for any investors who choose to position themselves in this specific market segment. The firm stresses that every year more and more holiday home owners are opting to lease them out to take advantage of the high yields they can secure.

The Algean Properties survey reports that according to the latest figures available from the Tourism Ministry, over 6,100 furnished villas across Greece have been certified by the Greek National Tourism Organization, of which just 55 percent had received that certificate a year earlier. That figure illustrates how attractive the utilization of those homes has become, especially considering that the average annual return across Greece reaches up to 5 percent, while rival destinations have yields of 3 to 4 percent in the peak period of July and August.

The survey also shows that luxurious homes in Myconos, Elounda on Crete, Rhodes and Halkidiki fetch the highest returns in the European market, which in Myconos’s case come to 7.4 percent.