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A Sanctuary in Santorini

May 22, 2009 by Fractional & Shared Ownership Property News & Reviews · Leave a Comment

By Angela West

Since the Greek Government relaxed its laws on foreigners owning property in the early 1990s, real estate in Greece has been on a steady upward swing, particularly so in Santorini, the most southerly of the Cyclades island group. The number of property-purchasing Brits on the island is on the up and Angela West reveals the appeal of nature’s work of art and what’s fast becoming recognised as a booming investment island.

There’s a very good reason why the jewel of Greece’s Cyclades is splashed so ubiquitously across brochures, posters and postcards…this unique, upmarket island’s natural beauty lives up to the hype and has recently been enticing more and more Brits to buy a slice of Santorini.

Officially known as Thira, it’s a peaceful, welcoming island steeped in history. The unusual horse-shoe
shape’s a result of the sheer power of nature…formed following a violent volcanic eruption around 3,600 years ago, the blast caused the island’s centre to collapse, creating the famous Caldera (large crater), leading to speculation that it’s the legendary lost city of Atlantis.
Encompassing most people’s typical Greek island idyll, Santorini’s setting’s a sight to behold and every
picture-postcard photographer’s dream…whitewashed villages of twisting, cobblestoned alleyways cling
precipitously to imposing clifftops, resembling snow-capped mountaintops, affording stunning views of the
lagoon, dotted with luxury yachts bobbing in bays and prestigious cruise-ships at anchor.

Nick Dinos from Santorini Selection says the mix of sun, sea, history and food’s part of the appeal: “This all makes Greece an attractive place for a second home. Santorini’s added ‘plus’ is the mystical Caldera basin…truly a sight that stays in your memory forever.”

“The island has alot to offer…relaxed lifestyle, low crimerate, cheap living, beautiful beaches, healthy diet…,”
adds Ruben Garcia of Iberian International.

Not surprisingly, painters, potters and jewellers have been inspired to set up studios and shops, culture-lovers can explore a wealth of monuments and ancient sites, there are beach and water-sports galore for the adventurous, traditional authentic tavernas and bars and clubs for night-owls, especially in the capital, Fira.

The property market appeals to all ages and many of Nick’s British clients, especially young couples, have made the move permanently: “I’ve seen prices rise as much as 300% in 5 years…sometimes even 100% in one year.” But he warns that prices can be high: “I’m always shocked to hear of purchase prices and it seems that there’s plenty of room for this trend to continue. Just when I think I’ve seen the peak, I hear of someone (usually Greek, who understand the local real estate environment and are bullish) paying an unheard of amount for something. Foreigners who don’t understand the local environment sometimes feel that Santorini’s overpriced.”
Property type’s an issue: “There really isn’t too much for sale…when something shows up, it’s usually scooped up quickly. Much of the land and many homes are kept for children and grandchildren and rarely put on the market.”

Luckily, a couple of projects by local and foreign developers provide solutions for homebuyers. Nick represents a couple of these and says new homes start at around €2500/m2 of structure, reaching €9000/m2 or more on the cliffs. He says the most popular properties are traditional cave-homes in the desirable cliff-towns of Imerovigli, Fira, Firostefani and Oia, a honeymoon hotspot famous for its sunset views, which are nothing less than spectacular: “These can run from 6000-9000/m2 of structure…unless you find a bargain.”

Developments tend to be in harmony with their natural surroundings: “Cliff properties are often unfinished caves or pre-1956 earthquake ruins. Renovation costs run higher than average due to the ‘man-and-mule’ hours required to transfer building materials to the site. The end result, however, can be fantastic…a traditional-style cave-home with all modern amenities, plus magnificent view.”

Inland, the most popular area’s picturesque Pirgos. Close to the port, airport and Fira, home to the famous blue-domed church with its white bell-tower, Agios Minas, the symbol of Santorini, Pirgos is a stone’s throw away (downhill by car, of course!) from the beautiful black-sand beaches of Kamari and Perivolos.

Ruben says 2-bed villas, available at around €185,000, are currently the most popular properties, especially in the Kamari area: “Although prices have increased recently, there are still properties with exceptional value for money and a sound investment. Whether you’re planning to live here permanently or use your property as a holiday-home and rent, there are still lots of bargains to be had.”

Nick says the island’s popularity means buying something at market prices today’s usually a bargain next year: “Sometimes you can find things below market-value. I constantly see people’s investments quickly rise 20-50%. This yield usually comes from lack of supply but also arises due to strong demand, mostly from locals trying to reinvest corporate income back into tangible assets, especially after a good tourist season.”

Ruben says prices have appreciated by 10-15% over the last few years and puts predicted capital growth at around 15%.

“I’ve seen capital growth at around 25% in the last 5 years,” says Nick. “Rental income’s a different matter because renting to tourists requires marketing expenses and perhaps a management contract…individual property managers are hard to come by. If you can rent your property to tourists, the return would be much higher than the 4% you’d get from renting to locals.”

Costas from London bought a 3-bed, 2-floor plus basement villa near the historical town of Akrotiri as a holiday home last year: “Santorini appealed due to its romantic atmosphere created by its ‘other worldly’ beauty. Add the amazing sunsets, unusual black and red beaches and you have a unique identity and magical quality defining the island.” Costas lets out his property when not relaxing here, away from his hectic London life: “It’s ideal for people wanting to experience the beauty in their own private space.”

Santorini’s international airport receives direct, low-cost charter-flights from the UK, along with regular ferry services, daily high-speed ferries to-and-from Athens and high-speed catamarans from Crete.

“In the last 10 years, the communications and infrastructure have improved remarkably, with the construction of high-standard roads, good transport systems, clean drinking water, new sewage and electrical systems, hospitals and a university,” says Ruben. “It’s accessible all-year-round, but remember, it’s a very small island that slows downs in winter.”

Nick says agency/broker fees are 2% from the buyer/2% from the seller, plus VAT, and choosing an English-speaking broker who can refer a good lawyer’s crucial: “It’s fairly easy to communicate in English as the island’s been involved with tourism for so long. From personal experience, it’s easier communicating in English with Santorini Greeks than in America with New York cab drivers!”

Planning laws are tight in some cliff areas and restricted slightly on rural land. Referred to as the ‘red zone’, 10,000m2 of land on the cliffs is required to build only a 150m2 home plus basements: “The ‘red line’ determining the start of the cliff-zone was created to protect the aesthetics of the Caldera cliffs. Theoretically, basements cannot be used as living space, but everyone does it,” Nick reveals. “Rural land requires 4000m2 (soon 6000m2 ) to build 200m2 of home plus basements.”

Nick warns that if building multiple units on agricultural or cliff-land, homes must have either adjoining basements, cisterns or an arch connecting the properties: “If buying or selling one of two or more homes built on agricultural or cliff-land, be aware that land cannot be divided into individual plots.”

He says only property in town-zoned land can be subdivided and town-planning gives a much higher building ratio of anywhere from 20-80% of the land size, limited to two stories: “Townzoned land can be much more expensive per/m2 . Ideally, the best land to have is cliff-land, zoned within the town-plan. There are such cases in villages like Fira, Oia and Imerovigli, and the price for this land usually starts at €1200/m2. Be careful if someone tries to sell you land which is ‘Entos Oikismou’ (within town-limits). “It’s not the same as ‘Entos Sxedioiu’ (within town-planning).”

An established democracy, Greece is now a member of the EU: “This has some bearing on the purchase decision since political and economic stability are pretty much assured,” says Nick. “For Europeans, the purchasing process is quick and simple. You should budget up to 15% above the purchase price for lawyer/notary/transfer expenses/broker’s fees etc.”

“Mortgages are available for EU citizens and the rates can be really attractive,” adds Costas.

Greece is giving Spain a run for its money on the British package-holidaymaker front: “There’s great demand during the summer season and many tour operators put properties on their books after they meet Government-regulated requirements for shortterm rental,” says Ruben.

“The rental process is simple, involving only a personal agreement stamped by the local tax office,” Nick explains.

“Provided there’s appropriate marketing, rental returns can be extremely good, especially in July and August,” says Costas. “A few summers ago, we were approached by two overseas buyers offering €50,000 more than we purchased the villa for at the beginning of the year!”

Tips for tempted readers? “Do your research beforehand and always go with a reputable company,” advises Ruben.

Nick says developers can make a profit… if they do their maths properly: “The highprice, zoned-land can minimise yield. Careful consultation with a broker and civil engineer and patience is required to find the perfect property. Supply’s low, especially for building plots, thus you sometimes have to wait for something to ‘pop up’,” he warns. “When you find your opportunity, grab it quickly or there’s a good chance you’ll lose it…remember this quote from a local hotel owner regarding property prices on Santorini: ‘Expensive
today…cheap tomorrow’.”

FACTBOX
Santorini Selection / Santorini Real Estate
Tel: +302286025900
www.santoriniselection.com /
www.santorinirealestate.com

Iberian International
Tel: 0800 019 7997
Web: www.iberianinternational.com

Costas’ villas can be rented via holidaylettings.co.uk
http://www.holidaylettings.co.uk/12757

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