Holiday homes: Crete expectations

By Stefan Scibor-Kaminski
Posted: 2010/08/19

While Greece's economy is in freefall, property prices on Crete are riding the storm but buyers still need to be cautious, says STEFAN SCIBOR-KAMINSKI

THE RIPPLE effects of Greece's fi nancial crisis do not seem to have reached Chania on the west coast of Crete, which has come under the property investor's spotlight since easyJet started fl ying there from Gatwick in May.

Chania is centred on a charming Venetian harbour, which has been restored with a new marina added. Old warehouses are also being renovated a stone's throw from the old Turkish quarter.

"Land values and house prices have risen about 15 per cent per year for the past decade but further growth has stopped due to the global recession and Greek crisis," says agent Krystyna Psillakis, who has worked in Chania for 16 years.

Standard three-bedroom villas are on the market for £140,000 to £165,000 while ones by the beach are priced at about £210,000. "In high season you can expect a rental of £1,250 per week," says Krystyna.

Crete is sunny for about 10 months of the year with average summer temperatures of 28C which makes for a long rental season. There is plenty to do on the island, too.

You can take a boat cruise to secluded bays, walk through the popular Samarian Gorge as well as visit numerous archaeological sites.

Or you can just revel in the dramatic scenery and tuck into excellent mezédhes (the Greek version of tapas) with a glass of raki.

Michaela Raeburn, 51, sold her Cheshire home and bought a plot from land/build specialists Cretan Life last year. She decided to relocate to near the seaside town of Litsarda, which is 30 minutes from Chania.

She paid £27,000 to build a three bedroomed villa, which should cost about £115,000. She is currently renting and pursuing her dream of selling handicrafts while her property is completed.

"I felt reassured having Cretan Life organise the purchase and build and knowing that everything is above board," she says.

However, buying property and land in Crete is not without its pitfalls. The biggest problem is discovering that the seller did not own the land or that planning rules either prevent you from building on it, or the villa you have bought does not have planning consent.

It is here that Cretan Life has carved a niche for itself.

"We specialise in acquiring undervalued plots and ensure all the title deeds and permissions are in place," says managing director

Andreas Theocharides. "We provide investors with solicitors, builders and project managers."
Frankie Miles, a rental and tourism agent, adds: "Local knowledge and a good solicitor are essential so do as much research as you can."

There is a lot of change taking place in the planning legislation and the villa rental market.
The market for holiday villa rentals took off less than fi ve years ago and since then Greek legislation has been struggling to catch up. Many rules

that apply to hotels also apply to holiday villas such as a requirement to sign in guests when they arrive or having a lifeguard at every villa pool.

However, none of this deterred Guy Kelland, 42, a fi nancial adviser from Cheshire. He was researching Crete's property market for a client and

decided to invest himself. "I bought a plot three years ago through Cretan Life for £48,000," he says.
The plot has appreciated slightly but he retains the option to build a rental villa or a holiday home.
There may be some uncertainty in Crete's property market but there is also opportunity. The good thing is that legislative changes are moving

in a direction that will protect any future investments.
Cretan Life has various plots for sale from £25,000 for a 300 square metre plot (with permission for a 100 square metre property) to £225,000 for a 23,630 sq m plot

with permission for a build area of 426 sq m.
Building costs start from £100,000 for a two- to three-bedroomed villa with a swimming pool. Construction of a 200 sq m four-to-five bedroom villa with a swimming pool costs about £150,000.

• MORE INFORMATION:
cretanlife.co.uk/0161 439 1788. For those that want to make a long-term property investment they can do so through a Self Invested Pension Plan. westerncrete.com; west-crete.com; britsincrete.net