Is The 'Credit Crunch' Affecting The Corfu Property Market?
Well, yes of course it is, no one is immune from worldwide trends. Having said that, Corfu is lucky in a number of ways…
1. There are not thousands of properties for sale. We have a truly mixed market from €15,000 to €10,000,000. Therefore we are not dependent on any one particular market.
2. Our buyers are not just looking for a quick turnover on their property – the majority have fallen in love with the island and have made a considered decision to buy their property here. It is not an impluse buy following a special presentation of a ‘bargain deal not to be missed with ‘guaranteed’ rental income’ in a block of apartments in Bulgaria.
3. None of our buyers expect ‘the bargain of the century’. They tend to have researched the market, know the island well, know their own financial limitations, and are aware of what the future expenses of their property are likely to be. Prices here are not comparable to large developments in Bulgaria or Turkey for example, but they do compare favourably with popular areas in Italy or France. And the market has been steady for some years, no massive increases and no massive drops, just steady growth, so a savvy buyer knows that their investment will gain in value even if it is not going to make them a fortune overnight.
4. Buyers are not used to having flights on tap all year. They know that so far summer is easy, especially with the advent of Easyjet and the increasing flexibility of charter airlines to deal in one way flights. But they know that during the winter they will have to be a little creative – Easyjet + Olympic, or Venice and a nice boat trip, or something similar. Hence the situation is not as in some central European locations, where the property market is estimated to suffer a possible decline of up to 35% in areas where budget airlines are cutting back on flights to marginal destinations, especially in the winter. Winter flights to Corfu would be a bonus, but for most of our buyers they are not an essential.
5. Corfu is not dependent on any one nationality. UK buyers were probably in the greatest numbers, with Germans, Dutch, French and Belgian following behind. Now the market is opening up from Russia, not just the super rich but also the normal Russian or Ukranian family looking for a home in the sun, which represents a safe place to invest their money. And it is a safe place to invest your money – an EU country with a flourishing but not overblown property market, where the costs of maintaining your property are relatively low – electricity (with your TV licence and a small community charge included), water, and that’s about it. No nasty council or property taxes (not yet anyway).
6. Corfu is accessible. For many property owners it involves just a few hours drive and then a comfortable boat trip and a maximum of an hour’s drive to your home in Corfu.
7. And, of course, it is a SAFE place to invest your money. The crime rate is incredibly low. It’s still safe to wander the streets at any time of the day or night so far (this is not taking into account manic drivers on poorly lit roads I hasten to add!) and locking the door is the extent of anyone’s security (if they remember, that is).
8. Finance is still readily available. Northern Europeans are inclined to have a higher salary level than local Greeks. Therefore the banks look on them favourably when considering a loan aplication, providing the paperwork for the property is in order, the valuation in line and the applicant can provide two years of tax paperwork as a proof of income. A variety of loans are on offer, enabling buyers to pick one which best suits their purposes. We have contacts with many banks, so are able to point our clients in the right direction when it comes to finance.
9. The letting market is buoyant, particularly at the middle and higher level of the market. Rental returns on mid and high end villas are considerable – again please do not think they are going to make your fortune, but they can, if marketed correctly, pay for upkeep, pay the owners own holidays, and put something in the kitty for future improvements. This is one of the main areas where we at Corfuhomefinders and Corfu Premier Property find that we can assist our clients – we have many years extensive knowledge of the letting market in Corfu and can advise buyers on area, type of property and projected rental income.
Overall, we are finding this year that we probably do have a slightly lower number of viewings – but the ones that we seem to have lost are those would-be buyers who come on holiday and whilst here develop unrealistic ideas concerning property prices, renovation costs etc. Our clients now are those who have their feet firmly on the ground, who have based their property quest on the basis of knowing exactly they will do in terms of financing their property in Corfu – whether it be €100,000 οr €1,000,000. The’credit crunch’ might be making people think a little more carefully before they take the plunge but it doesn’t seem to be putting them off following their dream to have a home in Corfu.