ECONOMY

Holiday homes on Crete are attracting strong demand from foreigners; Russian interest growing

With a number of major tourism sector development investments having been planned on the island of Crete, but with none of them yet under way, the holiday-home market is showing that demand remains strong. Local real estate agents have reported even higher demand during the current summer season, in addition to increasing interest from Russian buyers. A positive aspect in the case of Crete is the great variety of choices with regard to locations, as well as the large number of still undeveloped areas. Such considerations help to retain optimistic prospects for the local housing market. Gradually, with the implementation of major investment projects focusing on the development of holiday houses, foreign market interest in Crete is projected to further strengthen, while developers are targeting high-income foreign visitors. Iraklion In the region of Iraklion, the area drawing the greatest buyer interest is located along the region’s northern axis, at a distance of 60-70 kilometers (or, an hour’s drive) from Crete’s capital. However, the island’s southern coasts are also becoming increasingly popular, while also fashionable are some regions away from the sea on higher land that offer staggering views. The most popular Iraklion areas include Aghia Pelagia, Ligaria, Kokkini, Hani, Gouves and Stalida, while elsewhere demand is high around almost all tourism developed areas, such as Elounda Bay (in Lasithi) and Bali (outside Rethymnon). Much demand has been recorded for houses with floor space of between 70 and 120 square meters. In recent years, increasing buyer demand has also been noted for apartments as part of small complexes which offer a series of extra features and services, e.g. swimming pools, open and common use spaces, small stores etc. New trends in the past two years include the development of traditional, fully equipped leisure complexes within villages offering nice views, which are primarily targeted at foreign buyers. Prices for newly built houses in Iraklion range between -1,800 and -3,000 per sq.m., and most of the buyer interest comes from Britons, Dutch, Austrians, Germans and lately, Russians. The rival region of Hania, having been a traditionally popular area for foreigners wishing to buy a home in Greece, is now the focus of foreign investors wishing to buy not houses but land. In recent years, a number of investments have focused on the development of holiday house complexes, primarily by Cyprus’s Cybarco and Leptos Estate, as well as Greece’s J&P Development. The UK and Germany are by far the primary sources of demand for holiday homes in Hania, as large numbers of holidaymakers from both countries have been favoring the island of Crete in recent years. Lesser demand comes from France, Denmark and Russia. Hania options Hania offers a wide variety of choice in terms of locations. The Apokronas and Kokkino Horio regions have been the leading choices in recent years, but the large-scale construction of houses is now turning buyer interest toward Kontomari (near Maleme), Ravdoucha and other alternative locations offering more peace and quiet and accommodations that are less densely built. Housing prices in Hania in 2007 recorded an increase of up to 5 percent year-on-year, with the cost of buying a holiday home ranging between -1,600 and -2,800 per sq.m., depending on factors such as construction quality, distance from the sea, view etc. Major Siteia plans Nevertheless, one of the largest development projects on Crete is planned on the eastern Siteia region’s Kavo Sidero peninsula by a British consortium of investors, Minoan Group. This regards the development of a tourist complex comprising three hotels and six holiday house villages as well as two golf courses on an 8,200-acre land plot. The entire plan is valued at -1.2 billion and is envisaged as commencing at the end of 2008, pending a court decision after a claim lodged by local conservationist groups. Faneromenis Bay, also near Siteia, has been chosen by Iktinos Technical and Tourist for the development of a tourism resort of 2 sq.km. budgeted at -130 million. The company’s environmental study and construction plan have already been approved, and work is expected to get under way in 2008. The plan includes the creation of a five-star hotel with 700 beds, a marina hosting 85 yachts, a 500-seat conference hall and 300 holiday houses. The second stage of the project includes the creation of an 18-hole golf course and a new holiday village of 500 houses.