Falling land taxes and the introduction of residency permits have seen the market for quality holiday properties on the Greek island of Rhodes rise. The Greek property market has fluctuated over the last few years, in common with much of the rest of Europe, but since 2013 local agents Engel & Völkers has been registering a continuous rise in the number of enquiries.
Land tax has been slashed from 10% to 3% in the Greek island, and the trend to greater numbers of enquiries was reinforced when the new lower rate came into force on January 1 2014.
‘We have registered a 30% rise in the number of search customers for exclusive homes in desirable locations,’ says Georg Petras, Managing Partner at Engel & Völkers Rhodes.
The market in lower-priced homes is characterised by greater elasticity of supply – more homes can be built fairly cheaply, while the pool of potential buyers is quite small. For luxury homes the opposite is true: investors and buyers are increasingly interested from as far afield as Russia and the Middle East, but the stock of available homes is limited by Rhodes’ relatively small size and the quality of the properties themselves.
Buyers of holiday homes and luxury properties often aren’t fulltime Greek residents – they tend to be either wealthy foreigners or Greek expatriates and in many cases, they purchase property with little or no borrowed capital. The majority of international buyers hail from Germany, the UK, Austria, Switzerland, Belgium and surrounding non-EU states but there’s an increasing amount of interest from the Gulf states, Russia and Eastern Europe. That’s partly a result of the increasing number of high net worth individuals in these places, reflecting a global trend; but it’s also partly caused by economic instabilities elsewhere. With stock markets capricious and growth uncertain, investors are eager to put their money into bricks and mortar, and ‘real estate in Greece is a good investment prospect once again as the bottom of the market in terms of property prices has passed and buyers are now being rewarded with high potential for appreciation in the value of their new homes,’ points out Mr. Petras.
Another appealing aspect to buying property on Rhodes, as elsewhere in Greece, is the fact that buying a property worth over €250, 000 automatically gives you a 5-year residency permit, which can be extended an indefinite number of times. This fact hasn’t been publicised as much as the ‘Golden Visa’ schemes of Portugal, Spain and Cyprus, but buyers and investors are getting wind of it and it’s boosting Greek fortunes.
The most sought-after locations on Rhodes are the old town of Lindos and the surrounding region, with the resorts of Pefkos and Vlicha. The whole of the island’s east coast down to its southernmost tip is also sought-after. Prices are high and homes with three or more bedrooms are most in demand. Interest in villas is particularly strong, with larger properties of five bedrooms running around €1.5m, apartments often about €125, 000 and three-bedroom villas ranging between €150, 000 and €200, 000.
Greek property may no longer be a bargain-hunter’s paradise, especially at the pricier end of the scale, but the market is clearly on the up.