Holiday Residential Property Market

Greece has the highest-level second home ownership in the EU. It is estimated that approximately 50% of Greek households own a second house. This is largely due to the rural to urban migration that has occurred over the last 60 years, where families use former rural homes as second homes. In addition, the ownership of a holiday home in a coastal area or island is common practise in Greece. In fact, it is not uncommon for high-income households to own 3 houses, one in the city, one in a rural village and one on the coast.

Despite having such an established domestic market for second homes Greece still has an undeveloped market for foreign buyers. Although limited official statistics exist, international estate agents in Spain estimate that 50,000 - 60,000 properties were sold to foreign buyers during 2005. By comparison fewer than 5,000 foreign nationals bought second-home properties in Greece over the same period. 50 million 'European baby boomers' will retire over the next 10 years. This figure includes a considerable number of affluent homeowners with large private pension provisions and long life expectancies.

This generation has also experienced good capital appreciation on their residential property. For them the purchase of a property in a warmer climate is both a lifestyle improvement and a sound financial investment. The most common method of purchase is through an equity transfer from residential property owned in the home nation. This enables millions of people to buy second homes in the Mediterranean markets.

Although there are a number of large-scale hotel and resort projects in the pipeline, most new supply fails to stimulate demand. Often new development is on a very small scale (1 or 2 units) and is not to international standards. Problems of illegal building and unclear title, had given the Greek market a bad reputation.

Accessibility to Greece and the islands is improving. It is possible to fly to 16 different locations in Greece from the UK and 15 UK airports now have flights to Greece. Charter flights operate from the beginning of May until November and scheduled flights to Athens, Thessaloniki and Iraklion operate throughout the year.

There are significant opportunities in this sector. There is strong demand for good-quality residential units in coastal locations. Managed residential complexes (up to 50 units), with shared facilities (swimming pools, tennis courts etc) and located close to existing towns and villages have proved very popular in the other Mediterranean markets.

Such developments need good quality promotion internationally and to tourists visiting Greece. In other markets it is common for developments to be sold off-plan, which further reduces the development risk.

Source: Lambert Smith Hampton