Real estate market in Corfu

[Nicodefreja]

Plenty of interest in my opinion, we are talking about all aspects of real estate in Corfu.

From the informations I have (need to be confirm), the cost of buying in taxes, charges, and so on is approx 10 % of the price. Inside this, 2% for the real estate agent, wich seems to me very reasonnable, compared to some others EU cuntries.

A licence for renting is not so expensive: approx 3000 euros, may be less.

Sure you need people to help you in this activity, particulary if you are not there ! But you don't need an agent ! You need someone to wellcome people at the airport, a gardener to clean the garden and pool each week, and a house keeper to clean the house frequentely, changing bedsheet, etc, etc .... This if you want to offer a high level service.

But for this, I already have a team available with nice and very reliable people, already in this activity and having a perfect understanding of what is a high level service (and honnestly, I'm very impressed by their high level of professionnalism !)

My business plan is more or less in the trail. The only problem is the house is missing. Because the asking prices don't match. They are not matching with anything: cost of construction, economy of the island, offer and demand, availibility of land plots, etc, etc, all things usualy ruling a real estate market.

Another example: we were also looking to Corsica to settle our residence. The level of asking price is the same, but the level of renting prices is much more higher (+ 30/40%), giving an interesting ROI.
Problem: we don't want to go back in France .....

[susanna]

There are certain houses and villas that have been for sale for ages and have not sold.  Usually there is a reason - either the price is too high or the quality is average and the property generally lacks the "wow" factor.  I would say that anything that is even slightly unusual - beautifully decorated, with traditional features, a prime location, or just something that stands out from the crowd - will sell come what may, and not always at a loss for the vendor.  The trouble in Corfu is that there are an awful lot of bog-standard villas that have been built during the fat years of tourism and now look dated and tired.

If you can find something unique - even if it far away from the sea - I think the rental income can be excellent.  Many of the owners of really high-end villas are not bothered about selling because they make an excellent return on tourism rentals during the peak season.  Probably to enter this market you would need to spend in the region of 1 million euros.  However there are some bargains around!

Purchase tax is actually quite low in Greece - and annual property taxation equally so.  To buy you need to calculate about 10-12% on top of the purchase price for all expenses - lawyer, notary, estate agent and tax. 

[Wildgeese]

Hi I have just joined your forum and although I have some sympathy that is being said if you are retiring and buying I don't see the point of the discussion. A property is worth what someone is willing to pay for it or the price is what the owner is willing to wait for. One of my jobs in the UK was an estate agent and the market in the UK was just as overpriced and probably is just as much today in certain parts of the country. I for one do not believe that you can "purchase" a view it's either there or it isn't I look at the property when buying and see what can be done with it for my taste as this is more important than anything in my opinion. If you are buying to retire like most people who have answered then you are in this for the long haul so property prices will rise but if you are retired does this really matter? Only your siblings who will sell the property when you die are interested in the property price unless they are wise enough to keep it as a holiday home and then rent it out just a note on that I have read other forums and it is claimed on them that a long term let does not need a license this was the comment about property on Crete. I think the information on this forum is fantastic and has also helped me in my decision making process also as a photographer and travel writer it would be a fantastic base for me.

[Nicodefreja]

  Probably to enter this market you would need to spend in the region of 1 million euros.  However there are some bargains around!
 

Very funny.

Susanna, I have to find this announcement for an hotel in Corfu, for sale at 56 million euros and now proposed to ... 6 millions. Maybe there is a gateway to this business, no ? Great opportunity!

Wildgeese, you're even more funny. You're right, earthworms will not take advantage of our money. Except that not being retired, and still having many years to work, it is still worth today to think about  investments, to have one, retirement plan. And loosing money .... what a beautiful plan for retirement!

Hey, real estate agents, are you flute players or grass smokers ?

Please, be back to reality, please, come on. You are giving an image of Corfu, where stupid people burns their money with any other idea except "ahhhh, I've got a place in the sun !" Come on !

Starting this topic, I was expecting to talk with serious people .....

[Trisa]

Starting this topic, I was expecting to talk with serious people .....

I think you are but obviously they are not saying what you want to hear.

[Nicodefreja]

Not exactly Trisa,

I think Bob is right when he says: "At this point of time you have all chance not to see your money back for a long time". Yes, the market not seems to be very healthy.

But when I hear: "the houses are belonging to Greek people waiting for better times". This is not true. The houses we are following are belonging to EU foreigners and for many of them they are for sale for more than 3 years. And their asking prices are regularely falling.

And when I hear: "those houses are for a long time on the market because they are not in good condition or average conditions and have a lack of wow effect". This is not true. The houses we are following are in good condition, from good construction and some are with high quality construction. And some have a real wow effect with a beautiful seaview in a quiet part of the island, and not far from Corfu town. But they are on the market for ages, going from one real estate agency to another (searching on internet, you can find so many things) with a (sometime huge) fall in price each time. But the original asking price is so crazy that they need several fall to become more realistic.

We have some view on some properties, all in average of 200 m2, middle quality construction. One on the top of the list, with a beautiful garden and many potential, has fall from 450 K€ to 220 K€. Just need a little effort again to be under 200. Some others seem to be hot to fall. Let's wait a little bit

The one I was talking in the starting message has fall from 600 to 400. But I think it needs another 3 years to arrive to a more realistic price.

[Annie54]

To be honest, when I see some of the prices of properties that are on sale now, it really makes me wonder whether these folks are in touch with reality.

[jan]

surely there are really two threads here........one is buying property because you love it and the other is making a good financial investment- not always compatible!
Plus I seem to detect a bit of 'let's push the seller right down, taking advantage of their situation and the current crisis'  Of course everyone wants a bargain but some are fair and some are not.

[Banksy]

Yes Jan, but life is unfair! Do you not remember the days when local property owners pushed foreign buyers up to and even beyond a "fair" price??

[Trisa]

 Do you not remember the days when local property owners pushed foreign buyers up to and even beyond a "fair" price??

When we first moved to our village, we were asked if we would like to buy the house we were renting. It was and still is a lovely old house. At the time we thought the price was fair. Unfortunately, as soon as we showed interest, the price went up every time we saw the owner!

[Nicodefreja]

surely there are really two threads here........one is buying property because you love it and the other is making a good financial investment- not always compatible!
Plus I seem to detect a bit of 'let's push the seller right down, taking advantage of their situation and the current crisis'  Of course everyone wants a bargain but some are fair and some are not.

Jan, to be clear, this is not my position. I know that in Greece, like everywhere in the world, there are some vultures trying to take advantage of Greece crisis. I read some articles about that. But this is not my position. I'm just trying to be realistic, and trying to understand.

As I said previously, we were also looking to buy in Corsica, as I'm french and have some family there. In Corsica, estate prices are quiet in the same level than Corfu (a little bit higher, but not that much). But there, holidays renting rate are much more higher. Construction costs are much more higher. And the market is very dynamic, with a demand much more higher than the offer.

Investing in holidays renting estate is something very common, I have some friends doing it, and their ROI are usually around 8%, some 10%. And not with more than 1M€ budget properties. And without any risk, the value of estate is guaranteed to increase (and it does).

If I want to buy a flat in Paris, London, or NY, the price will be very high. But you can easely justify. There is no plot for construction available. This is a great place for working with the best salaries in the world. The demand is extremly high. And so on. It's called real estate rules.

And now, what about Corfu ? Land plots are highly available at very low cost. The demand is extremly weak. Holidays renting rates are very low. Construction costs are lower. The expects on the market are low. No bank will follow, so cash only. And so on. The only reason of high asking price is "because it's Corfu", waiting for lovers (or dreamers, just a question of point of view).

So, what is fair in this situation ? The seller hoping to make a great jump (and waiting ages for it), or the buyer knowing that this jump will be a net loss for him ?

That's a question.

[jrk]

Hi I have just joined your forum and although I have some sympathy that is being said if you are retiring and buying I don't see the point of the discussion. A property is worth what someone is willing to pay for it or the price is what the owner is willing to wait for. One of my jobs in the UK was an estate agent and the market in the UK was just as overpriced and probably is just as much today in certain parts of the country. I for one do not believe that you can "purchase" a view it's either there or it isn't I look at the property when buying and see what can be done with it for my taste as this is more important than anything in my opinion. If you are buying to retire like most people who have answered then you are in this for the long haul so property prices will rise but if you are retired does this really matter? Only your siblings who will sell the property when you die are interested in the property price unless they are wise enough to keep it as a holiday home and then rent it out just a note on that I have read other forums and it is claimed on them that a long term let does not need a license this was the comment about property on Crete. I think the information on this forum is fantastic and has also helped me in my decision making process also as a photographer and travel writer it would be a fantastic base for me.

Welcome to the forum! You talk a lot of sense.

[susanna]

Well I did try to reply honestly, but clearly other people know more than I do!  Or think they do.  Obviously there are many foreign sellers (not just Greeks) and many of them are going to be making a loss because of the way the market has moved in the last few years.  It is up to them to decide whether to ride out the depressed conditions or sell now in a hurry.  Some NEED to sell, and this is where the bargains are to be found.

We do have houses for sale near the sea that are making 8% and over in rental returns.  By all means ask - our website has contact details.

[jrk]

Susanna

"it is claimed on them that a long term let does not need a license"

Is this accurate, do you know?

[susanna]

Correct.  You do not need a licence for a long term let, and they have also made it much cheaper and easier to obtain an EOT licence for short-term letting as long as the income is below a certain amount.  I will check with my colleague who specializes in this area and post again later.