When, a few weeks ago, a couple of German MPs suggested that Greece might solve its debt crisis by selling off a couple of islands, their comments were reported with a few tongues firmly in cheeks. But, although the German newspaper Bild’s headline-‘We give you cash, you give us Corfu!’-provided comedy in the deepening Greek tragedy, there will be some of us who wonder about the effect of this turmoil on its 3,000-odd islands, many of which are popular second-home destinations.
Greece is one of a group of European nations in financial difficulties-Portugal, Ireland, Greece and Spain, or PIGS, to use their rather nasty acronym that could offer the opportunity to snap up a property bargain, but are these troubled spots too big a risk for investors?
Charles Weston-Baker of Savills suggests that the prime property areas of Portugal and Spain are still good bets. ‘The Algarve and Marbella are enduringly popular, but became very expensive; now, they offer great opportunities,’ he says. ‘Many people are putting their money in the Algarve’s Quinta do Lago. Now the froth has gone-the annual price rises of 15%-20% have come to a halt-people who have long wanted to own in these prestigious resorts finally can.
‘The same is happening in Sotogrande and La Zagaleta, with people going for quality at a better price. Although Marbella has been very heavily hit, interest is quickening and, having seen two recessions there before, I know the market can change very quickly. The best properties haven’t dropped much in value, but if people really need to sell, you can negotiate 30%-40% off the price.’
Andrew Hawkins, head of international at Chesterton Humberts, also plumps for the Costa del Sol-or Mallorca. ‘If people are prepared to do legwork, southern Spain is always going to be a good bet, down to the winning combination of geography, climate and access,’ he believes.
‘Individual villas have suffered -price drops of 25-30% are common. But, as always, choose the location carefully-go for sea views and access to amenities.’ He cites the example of a more secure market with soft prices Gran Folies Beach Resort in the sought-after area of Puerto Andratx in Mallorca, where a two-bedroom apartment that was €714,000 is now on the market for €550,000.
Although, for Mr Hawkins, Portugal’s time hasn’t yet come, Knight Frank’s Georgina Richards would put her money into a property on the western Algarve. ‘Prices have fallen by 30%, but will go up in the long term-and, culturally, it has a lot to offer, with charming fishing villages and great sweeping beaches,’ she says. ‘You can get a good-sized villa for less than €1 million.’
Robert Green of Cluttons Resorts sees potential further north on the Alentejo coast-between the Algarve and Lisbon-where he’s about to launch a project. ‘It’s an emerging area, costing 20%-40% less than the Algarve, yet planning has been restricted to premium brands-Banyan Tree, Six Senses, Park Hyatt. With question marks over Spain-corruption, over-building-more people might look to understated Portugal, Greece is one to watch-there’s no need to rush there.’
Beleaguered Greece deserves the last word. Piers Williams of Aylesford International-which has opened an office in the Ionian Islands this month-reckons that the lure of affordable beachfront means buyers won’t be deterred.
‘North-east Corfu and Mykonos are pricy, but the decline in the domestic market has tempered prices that were previously unrealistic. In Ithaca, Zakynthos and Kefalonia, you can get a decent villa with sea views for €600,000-€800,000. High-end stock is rare, particularly in the yachty hotspots of Fiskardo [Kefalonia] and Sivota bay in Lefkada.’
* For more International property like this every week, subscribe and save
