The news from Greece is unexpectedly cheerful, especially in Rhodes where Savvas Savvaidis is based. How have they weathered such a storm?
This past year has been surprisingly positive for Greece. Foreign investors are now returning to the country, large amounts of cash deposits are back in the banks, structural reforms are being actively implemented and, according to the IMF, the country will reach a true primary balance by the end of this year; a remarkable achievement with no other precedent in the world’s economic history. The cost has been high.
As a result, the Greek real estate market has suffered. Since the start of the crisis transactions are down by 60% and prices have reduced by 10-40% from the peak.
However, not all areas in the country have faced the property recession in the same way. Areas with extrovert economies such as the popular Greek islands have seen the effects of the crisis in a far less dramatic way than that of the Greek mainland.
Rhodes is one of them.
In effect, Rhodes’ property market has shown a remarkable resilience. Surprisingly, sales in 2012 have been up by 20% in relation to 2011. Whilst classic second home destinations in the Mediterranean such as Southern Spain and Cyprus have experienced a steep decline in their property markets. Rhodes has weathered the storm very well. For people that know the local economy this came as no surprise. Here are some reasons that Rhodes remains popular:
Limited Supply: the stock of houses for sale on the island has always stayed at regular levels. Unlike Spain and Cyprus, where local and international developers have created a massive building industry, Rhodes’ development of second homes has grown on a limited scale. Second homes have been built by small and medium size family run companies in small groups.
It is worth mentioning that throughout the island between 2001-2009 there have been only four development projects, with no more than 25 houses each.
All time classic: the beauty of the island, its rich heritage, the healthy climate and the authentic Greek lifestyle have been, and will continue to stimulate the demand for a home in Rhodes. The internet revolution, the mobile communications, satellite televisions and cheaper flights are making it easier to relocate without feeling isolated. Rhodes’ land registry, together with the islands’ strict building regulations are a guarantee for an easy and safe purchase procedure.
Value for Money: Rhodes’ prices are great value for money compared to the rest of the Mediterranean; as of January 2013 the average price, for a three bedroom property with a pool in Mallorca is €400,000 while at the same time it is circa €300,000 in Rhodes.
As Greece is now on the road to economic recovery and the country’s tourism destinations are more popular than ever, the appetite for a second home on the island of the sun continues to grow. After all, this is the best buyer’s market in decades and prospective buyers know this all too well!
Article by Savvas Savvaidis of Savvaidis & Associates, published in OPP magazine April 2013