Real estate market in Corfu

[Nicodefreja]

Hi everyone,

My wife and I, living in Corfu for a year and a half, have the plan to settle there definitively. For this, we plan to buy a house, that we would live in the winter and rent the summer.

The real estate market here seems a bit complicated. I have been watching since we arrived.

Prices are still very high compared to construction costs, and the market does not seem very dynamic. I see houses that are for sale for several years (necessarily, considering their price!). And their price fall, lower, lower ....

This is the same trend for land plots, but even more so. The offer is huge !

The trend seems to be sharply downward. We do not want to hurry, because we are afraid to buy a property that will have lost half its value in a few years.

It seems that real estate offer is much higher than demand and overpriced.

For example, we have a view of a house of 230 m2 (to be checked, the surfaces are often exaggerated), good quality construction, with a beautiful sea view, on a plot of 1800 m2 (which is small) Without swimming pool. This home is for sale for over 3 years. It was originally proposed (as far as I could find on the internet) at 600 K €. It has been falling steadily since then and is now available at € 400,000.

For me, if I compare with the cost of an equivalent construction, I would not propose, if I want to make an offer, no more than 200 K €.

What do you think ? Do you think that the Brexit will have an impact on the real estate market here?

More generally, what is your view of the market here?

[susanna]

Hope you don't mind me replying as an estate agent to your questions and concerns.  To start with the house you mention, if it is 230m2 would cost €390,000 to build at today's going rate.  This is key in door with ALL expenses, national insurance, etc. but does not include the cost of the land.  Any land plot with a sea view will cost more than one without (the island factor means that a sea view is almost an essential for most buyers, whereas if we were Tuscany or the Dordogne it obviously wouldn't enter the equation).  You might find a local jobbing builder to build a house for less than the above, but in my experience this is risky and something - often something quite important - gets "forgotten" in the quote and causes problems later.

There are bargains to be had - some owners are keen to sell because of their tax liabilities for properties that don't pay their way.  However, most Greek vendors are selling houses that they do not live in and prefer to wait for the right price, even it it does take years, so the property market is not like anywhere else in Europe.

There are certainly some very over-priced properties - it is hard to persuade vendors that their much loved house is not worth what they think it is.  We do try to suggest a reasonable sale price, but because there are no areas of identical houses for comparison purposes we are not always successful.

Please contact us at Corfuhomefinders in Dassia if you would like to talk some more.

[Aceman]

Interesting reply Susanna,I understand what you mean with it being a different market to the rest of Europe so as an estate agent are you selling many properties? And if so in what price bracket. If you don't want to answer I completely understand.

[susanna]

People fall in love with Corfu and want to live here despite everything, so a simple answer would be that we are selling consistently - with an upward rather than a downward trend.  There isn't really a pattern but probably the most popular price range is between 100,000 to 300,000 euros.

[Nicodefreja]

Thank you for your reply Susanna. There are elements on which I disagree, but let's move on.

But there are some elements that I do not understand.

As most of the homes that I' following are also for renting in summer on many websites, it is very easy to find their owners. Almost all are foreigners, not Greek (almost because for some I can't find the owner).

Moreover, this poses a big problem in terms of ROI.

An example, a villa of 200 m2, with a beautiful view and a swimming pool, which is for sale on your website at 550 K € + 10% of purchase costs which makes more than 600 K €.
This one is also to be rented in high season at 1750/2000 € the week, which means that one can expect an income after renting taxes less than 20 K €, not to mention the maintenance costs, so a ROI of .. ... 3%!

If we count everything, other taxes and maintenance, and even considering that the price of the rent may could be higher (but not that much), we still remain in a ROI of 2 to 3%. Even at the bank you can get better.

There is something wrong. Corfu may not be a good place to invest, with a property market too high compared to a seasonal rental market too low, I don't know and don't really understand

[Bob]

Nicodefreja,

I will make one observation. Corfu is NOT a good place to invest in property at this point in time. (Unless you can afford to sit on your property for a very long time!)

[rene higuita]

It is easier to buy a holiday house than to sell a holiday house. This is not at all unique to Corfu. And some holiday houses will never sell. This can cause great hardship to people who, for family reasons or personal reasons really have to sell. I have friends trying to sell a chalet in France....I have other friends, who have contributed to earlier versions of this board, who are in distress because they can't sell their Corfu house without making a thumping loss.

As for ROI, I think you have this wrong, Nicodefreja. You have to split the capital cost from the running cost. You need to deploy your capital and, mentally, write it off. For your capital you get a house to live in and holiday in. You might make a profit on your investment. You might not. I most certainly will not. In my view, the economic attraction of renting out your house in the key school summer holiday weeks is that you should be able to make a profit on your total annual running costs and repairs and, therefore, to run your house quite expensively. I think you could aim to have your rent equal to 2 X your running costs, before tax.

[susanna]

I agree with the above comments.  You would make more money - if income is your prime concern - from a small terraced house in the north of England, but you would not have the fun and pleasure involved with owning a holiday home in the sun which you can use yourself and rent out in the prime letting periods (school holidays mostly).  Also if the property is in an excellent location with a sea view then you can always improve the rental potential.  There are ways, which I will happily explain to you face to face, but would rather not give away all our secrets on this site!  I'm already slightly concerned, to be honest,  that you say you can easily find the owners of the villas you are looking at on our site.  We know that this happens, but we hope and trust that most buyers will be honest enough to recognize the time and effort and expense that goes into running an estate agency.

[Nicodefreja]

I'm already slightly concerned, to be honest,  that you say you can easily find the owners of the villas you are looking at on our site.

In all business and in my business, we use to say that a customer never belong to anyone. It's the same for an owner. Like in every business, if you offer a professional service at competitive costs, you van have a lot of work. And this is what I sincerely wich to you. And don't worry, there is no house in our view on your website (sorry). This was just an example.
It was only to say that your argument (houses belonging to Greek waiting for better times) was not true. And to show that prices are not matching the market.

I am very surrpised with comments like "don't stand for a ROI, just be happy to spend and enjoy".

This is the first time I read that ! Strange concept of business .....

I will say it tomorrow to the owner of the house we live in actually. He will find that interesting I'm sure. He invested in several houses in Corfou for holyday renting. However.

As I said starting this post, we DON'T live in Corfu in summer. From june to october we go sailing. Our main house is our boat.


And Bob, why do you say: "Corfu is NOT a good place to invest in property at this point in time" ?

[Bob]

And Bob, why do you say: "Corfu is NOT a good place to invest in property at this point in time" ?

Because you will not sell it at a profit for many years.

[Aceman]

Great post Rene and susanna maybe one day we can meet and have a chat over a coffee 😊

[Aceman]

Bob I was having a meal and a chat with Harry down the bottom of your hill and he came out with some very interesting points about property in Corfu and what sells and what doesn't.

[Nicodefreja]

Because you will not sell it at a profit for many years.

Yes, regarding asking prices, I'm very close to your opinion.

Aceman, is Harry's point of view is confidential ?

[Aceman]

No not at all Nico and after all it's just someone's opinion at the end of the day,he was saying because of large choice on the island the new or top quality places would sell,rent a lot easier than those that were dated. Now susanna may know better as as she after all is an estate agent

[jrk]

I agree with the above comments.  You would make more money - if income is your prime concern - from a small terraced house in the north of England, but you would not have the fun and pleasure involved with owning a holiday home in the sun which you can use yourself and rent out in the prime letting periods (school holidays mostly).  Also if the property is in an excellent location with a sea view then you can always improve the rental potential.  There are ways, which I will happily explain to you face to face, but would rather not give away all our secrets on this site!  I'm already slightly concerned, to be honest,  that you say you can easily find the owners of the villas you are looking at on our site.  We know that this happens, but we hope and trust that most buyers will be honest enough to recognize the time and effort and expense that goes into running an estate agency.

Out of interest, what is the level of tax the purchaser have to pay these days?  This seems to change now and then.

Renting out requires a license which is expensive to obtain and then there is tax on renting income. Also, the cost of an agent to take care of visitors. So renting out that worthwhile unless you have a big place?