How do real estate prices move in tourist areas?

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By Eleni Bota

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Both international and domestic demand for the purchase of homes in the popular tourist areas of Greece is particularly high, as in some cases the requests of interest for home purchases are more than double compared to previous years.

This follows from Spitogatos’ recent data for the first quarter of the year based on the Spitogatos Price Index (SPI), which records the evolution of prices over time in the domestic real estate market.

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In particular, in the first four months of this year, Mykonos stands out in the tourist area with the highest asking prices for residential sales at €5,714/sq.m. followed by Santorini with an average asking price of €3,333/sq.m. respectively.

It is interesting to note that the average asking price in Paros, which in 2021 was at the same level as that of Naxos (Paros: €2,895/sq.m., Naxos: €2,698/sq.m.), shows a higher – at least in the first four months of 2022 – approaching the average sale price of a house in Santorini.

As for Crete, and in the first four months of 2022, the regions of Chania and Lasithi are placed higher in terms of the average asking price of residential sales, while the Region of Heraklion emerges as more economical than the other three regions of the mega-island.

Popular islands in the Aegean and Ionian Seas

Examining some of the most popular Greek islands, both in the Aegean and the Ionian Sea, it is observed that the evolution of the average asking price has shaped new dynamics on the map (2021) compared to the previous years (2018-2020).

Particularly:

Paros & Naxos: In 2021, the average asking price for the sale of a residence moved at approximately the same levels (Paros: €2,895/sq.m., Naxos: €2,698/sq.m.) compared to previous years (2018, 2019). The gradual increase in prices in Paros and Naxos does not seem to have been affected in the period 2020-2021, during which the average asking price of a house increased by 14.3% (Paros) and 13.0% (Naxos) respectively.

Rhodes: For the public interested in investing in the housing market, Rhodes is consistently (2018-2021) the most economical region compared to the rest of the South Aegean islands examined (Naxos, Paros, Santorini, Mykonos). It is noted that the average asking price of a residence in Rhodes in 2021 was €1,400/sq.m.

Santorini vs Mykonos: These are two of the most popular islands in the world. It would make sense that the average asking price of their homes would be at the same level, which the data does not reflect. Characteristically, in 2021 the average asking price for the sale of houses in Mykonos was 5,364 euros/sq.m., while in Santorini it was 3,382 euros/sq.m.

Focusing on the typology of real estate, it is observed that in Mykonos several advertisements per year, from 2018 to 2021, related to the sale of villas, with the corresponding percentage in Santorini being lower.

Thus, in a review of the most recent year-on-year data, we see that the supply share of villas for sale in Mykonos and Santorini in 2021 was 29% and 8% respectively. It is noted that the villa is the type of residence with the highest asking price in 2021, the average asking price of a villa in Mykonos was 6,538 euros/sq.m. and in Santorini at 6,081 euros/sq.m.

This specific factor seems to have played a decisive role in the above difference, if we take into account that – excluding villas, which are the type of residence with the highest price – the average asking price for the same year for the remaining types of residence was 5,000 euros /sq.m. for Mykonos and at 3,172 euros/sq.m. for Santorini, with the former again moving to higher price levels, but with a smaller difference.

Corfu & Zakynthos: As far as the Ionian Sea is concerned, Corfu and Zakynthos move at approximately the same levels in terms of the average asking price of residential sales, compared to the other cases examined. It is worth noting the upward trend of the average sale price of a residence in Zakynthos, with a change of +6.3% in 2021 compared to 2020, in times of pandemic.

Islands in relation to popular tourist destinations of mainland Greece. The case of Crete

As mentioned above, from the cases examined, it is found that the highest asking price for the sale of houses is found in the islands of the Cyclades such as Santorini, Mykonos and Paros.

In the map of changes in the period 2020-2021, Naxos, Paros, Rhodes and Zakynthos stand out with an increase in the average asking price of a residence by 13.0%, 14.3%, 8.4% and 6.3% respectively.

Crete has always been a special case, given its size and popularity in terms of tourism. Regarding the average asking price of a residential sale – per year, from 2018 to 2021 – a higher price is found in the regions of Chania and Lasithi.

The pandemic does not seem to have stopped the upward trend of prices in the Heraklion Region with an increase in the average asking price of a house by 2.6% and in the Chania Region with an increase of 3.9% respectively.

On the other hand, in 2019 and after, a gradual decline in the average asking price of a residence in the Lassithi Region is recorded with a change of -2.2% in the period 2019-2020 and -2.4% in the period 2020-2021.

The asking price of a house in the Rethymnon Region follows an upward trend, which given the change in 2018-2019 and 2019-2020, seems to have stopped in the period 2020-2021.

Source: Capital

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