Holiday-home market in Greece has large, untapped potential

The market for holiday homes in Greece is characterized by misleading information to prospective foreign investors, a lack of a comprehensive legal framework, improvisation and inadequate marketing. This means that the segment of the property market which many consider a potential pillar of growth for the Greek economy still has a long way to go before reaching its potential. Participants in the construction sector of Greek holiday properties include both small local companies and big groups, which are now starting to build holiday complexes. Cypriot groups with experience have a strong presence and a large number of projects in hand on the islands. The market could be divided into three categories: first, holiday homes as part of integrated resorts which include hotels. Second, independent holiday villages, and third, properties that are usually part of golf course installations, as frequently found in other countries, particularly in the Mediterranean region. «The holiday-home market perhaps presents the highest risk among all the different types of property, despite the fact that Greece has excellent prospects. The reason is that it is not seen as a necessity but as a luxury; first-time homes are a necessity and demand will always be strong for them. By contrast, holiday homes are much harder to sell, particularly to foreign citizens who must be persuaded to move to another country,» says Akis Kyratzis, managing director of Cybarco Hellas, a member of the Cyprus-based Lanitis group, which is also active in Greece. Market experts see as a positive development a recent provision allowing up to 35 percent of land plots outside town limits, over 30 hectares in size, to be turned over to housing developments. These homes may be leased or sold to foreign buyers; the basic idea is to attract a nucleus of permanent visitors who will attract more of their compatriots. «It is important to realize that the foreigners who come to Greece want to live together with the Greeks and like the Greeks. Those who will buy do not wish to buy a home in a tourist ghetto. Only very few property development firms have realized this,» Kyratzis said. Another problem is the lack of town planning for such projects. Developers must proceed under private planning regulations, which are especially time-consuming. «Today, both the business and legal risks are wholly assumed by the investor, and this has an obviously discouraging effect. I believe that holiday-home construction and the development of integrated resorts will offset the slowdown in the GDP growth rate after the end of the Olympic Games next year,» said Kyratzis. And in contrast to Olympic projects, such development would be much more evenly spread around the country and attract high-income tourists. The government recently introduced special housing zones in each prefecture, which it is hoped will stop illegal construction in non-designated areas.