Not too many people are buying property in Crete as an investment.
But if you ever decide to sell your house in Crete it could become
an important issue. So what have property values
done and what is going to happen in the next few years? Can the growth
continue or has it already gone too high?
A look at the last ten years
Integration in the European Union made buying property in Greece
a relatively simple matter for EU nationals and they started buying.
It was a few individuals here and there at the beginning who then
passed on the word that Crete was a good place to live and more and
more came, creating a real property boom in some areas. Not surprisingly
prices have increased by a healthy percentage...maybe 20% a year
on average which made property a very healthy investment indeed.
The demand for property was not only fueled by foreigners: until
about 15 years ago not too many Cretans had cars (they were too
expensive). Then quite suddenly, some taxes were lifted, inflation
decreased making bank loans and cheap credit possible and within
the next 10 years car ownership trebled (this is a guess...at least
it is what it looks like). With cars, commuting became possible and
more and more inhabitants of the cities started moving out into
rural areas and building larger, more modern houses. Some areas such
as Kounoupidiana (on the peninsula of Akrotiri) or Daratso and Galatas
(to the West of Chania) are in the process of becoming virtual suburbs
of Chania and prices in these areas have climbed very fast,. So
now people are looking a little further afield as commuting becomes
more accepted.
What does the future hold?
Of course, some of the crazy prices increases which have been seen
in some parts such as Plaka and Kokkino Chorio in the Apokorona region
(land prices increased by up to 2000% in the last 15 years) cannot
be held anymore. It is commonly agreed that the more fashionable
parts of Apokorona and the old town of Chania may have reached their
peak and that prices will stabilize.
Many people put off by large concentrations of foreign owned properties
and high prices will start looking further afield. This is happening
towards the West of Chania all the way to the west coast of Crete.
My guess is that property prices will still sustain a healthy growth
in these regions in the next few years.
Of course, this is partly
dependent on other economic factors. The current boom in foreign
property is being fueled by British buyers who are used to immensely
expensive housing in their own country, may now own their houses
in Britain and therefore either have the means to sell in Britain
and buy a much nicer property here AND put some money aside or they
can easily raise a loan on the equity of their British property.
Should the British housing market experience one of its cyclical
collapses there is no doubt that it would cool the housing market
in Crete to some extent.
But one thing is sure: Crete is still in the early days of development
as a place for second homes and retirement for foreigners and unless
some drastic and unpredictable external factor happens the trend
will grow for years to come. This means that prices will keep growing
as well. Maybe not the dizzying increases seen in Apokorona in the
last few years but enough for property to be a good investment, returning
a little more than having your money sitting in a high interest bank
account.
What kind of properties will resell well?
Most properties (bar the exceptions listed below) will appeal to
someone but a good view will always sell easily. It doesn't have
to be a sea view but an open view. Easy access to the main road network
is also a plus point. A quiet neighbourhood, no noise from traffic
are also positive aspects. The rest is really a matter of personal
taste.
What kind of property might be hard to resell?
Houses where building has occured all around, cutting off any view,
are far more difficult to shift. Small places with nasty addtions
done on the cheap by the previous owner will also find few takers.
Anything with additions in breach of the original building permit
will also be highly problematic.
I can see another problem coming up in the future: not a few houses
built solely with foreigners in mind are built for the summer, with
minimum insulation and cheap windows and may not withstand the harsh
winter weather for too many years. How will they fare after 10 years?
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