And yet the doors to the country remain open and inviting to those who want to buy property in Greece no matter what your budget or requirements without the sting in the tail that overdevelopment all too often provides. The tempting invitation Greece sends out to those looking to buy property overseas has not gone unnoticed in recent times. "Over the last ten years the extent of foreign ownership of Greek residential property has gone through the roof," says John Batty from Aegean Blue. "The lifting of government restrictions, improved air access and the increasing availability of mortgage finance has meant that those looking to buy property in Greece have been able to acquire second homes in their favourite holiday destinations. And although this increasing demand has led to significant increases in the value of coastal land, property prices in Greece still compare very favourably to those in other EU Mediterranean countries."

Greece is still at a relatively early stage in the growth cycle compared to fellow EU nations Spain or France and you can still buy good property for around £100,000. However, the laws in Greece are strict regarding the development of property close to the coast, in areas of forestry or archeological interest, which will inevitably push up house prices as supply slows in the coming decade. "Greece offers a rare opportunity to buy property in a market where prices remain attractive yet where there are genuine reasons to believe that demand will outweigh supply over the long term," Batty says. "The risks to anyone choosing to buy property are low in Greece but the prospect of property prices moving steadily upwards at rates of 10 per cent to 20 per cent per annum is real. Shrewd property investors will see the risk/return equation as one to pursue."

In contrast to other, less-established markets, Greece is a long-standing permanent member of the EU, enjoying the benefits of economic prosperity and domestic stability just as its political partners. The country's macro-economic environment is also stable, its legal system long-established and laws in are place to protect both the property buyer and the country's cherished landscape. "The property market in Greece has become well established over the last few years and if those seeking to buy follow the correct channels, laws are in place to protect the purchaser and their money," says Hilary Dawson from Crete Homes. "It should not be difficult to find an English-speaking lawyer and notary as well as licensed estate agents in Greece."

Taxation changes have recently also been put in place to protect those who buy property in Greece from the artificially high prices that have stung many European markets in their maturity. "The market should be stabilising over the next couple of years," explains Dawson. "From January 2006 a law was introduced whereby all property in Greece purchased  from that date was liable for a capital gains tax of 20 per cent if resold within five years; this lessons as the amount of time increases. "The tax is calculated on the difference between the tax office assessed price, both at the time of when the property was bought and of selling, if there is an increase.  The tax decreases to 10 per cent if sold within five to 15 years and 5 per cent if sold after 15 to 25 years.  This is to slow down unnatural property speculation in Greece and rein in artificial high property prices, particularly on renovation projects and cheaply purchased properties." Because of the regulations the government in Greece has put in place to stop the kind of development witnessed in other European coastlines during the 1970s and 1980s, few areas of Greece have suffered overdevelopment.  "There may be a few areas on some of the islands in Greece which now bear little resemblance to how they were 30 years ago, but even so the density of property development has been controlled and the style of building has generally been such that eyesores are few and far between," says Batty.

The north-west side of Crete is one of a limited number of areas that has been subject to intense construction of property developments, although these are rarely high-rise and tend to be in the form of complexes with shared pools. Susan Peters from Cybarco observes that there has also been some property overdevelopment in urban areas. "Cities and towns have been overdeveloped but this lead to the expansion of urban boundaries and the creation of new suburbs," she says. "The islands and areas outside the urban boundaries are still not developed and there is a great potential to buy property in these areas."

In terms of property investment potential in Greece, for the best short-term return the country's main islands are a safe bet. Tremendously popular with tourists and with very mild climates, Crete and Rhodes are two islands in Greece that have a good infrastructure in terms of transportation and healthcare and both have international airports. "Crete is one of the most popular islands in Greece as it is the largest with excellent infrastructure including two airports and another being expanded," says Dawson. "It also has a regular ferry service to the mainland and other islands." Dawson goes on to explain how the demand for certain types of property has changed in Crete as those seeking to buy have realised that they can now have a ready-made, modern – but not out-of-place – second-home on the island, also ideal as a short-term investment with great immediate rental potential. "Originally, the choice of property was concentrated in the villages, or there were plots of land where people constructed a house unique to their needs. Now many people look to Crete as an island where they can buy a modern property in the sun, with a swimming pool and many developers are building homes with this in mind."

For thos wanting to buy for a longer-term property investment opportunities in Greece, seafront land in unexplored areas such as the Pelponnese is what Batty suggests. "The southern Peloponnese is definitely an area for the future as it offers the opportunity to buy into the traditional Greek lifestyle at very attractive prices," he says. Indeed, the Peloponnese holds many tourist attractions, including the Corint Canal in the east – which separates the eastern Peloponnese from the mainland near Athens, Greece's second largest city, Patras – home to a large port – in the north, the historical homes of the Olympics and King Agamemnon in the south and spectacular beaches in the south-west.

For those looking to buy apartment style property in Greece, although a lot of new developments in the country feature a mix of different property types including apartments, Batty states that the country doesn't offer many large-scale holiday apartments of the kind found in other European holiday destinations.  "Crete has the widest choice of apartments because of its size," he says. " But most islands and also some mainland destinations, such as on the Gulf of Corinth, will have a good supply of quality apartments." Most areas along the north coast of Crete are popular with those wanting to buy seeking apartment style
property, in particular Elounda, Aghios Nikolaos, Rethymnon and Chania. "Some of the holiday resorts, such as Malia in the north east, are very quiet in the winter and so not so suitable for winter holidays," says Dawson. "The south-east coast is mild in the winter and although the journey from the main Heraklion airport takes about two hours, the area around Makrigialos has a varied mix of property to buy including apartments."

If you are looking to buy a luxury property, such as a villa, Greece offers a great deal of choice. "There are beautiful villas in stunning locations all over the country to buy," notes Batty.  "The Cyclades offer traditional 'cubist' architecture, the Ionian Islands have more of a western European profile, the Dodecanese have some Turkish influences while Crete has property for everyone to buy. And of course islands like Mykonos – long the home of 'jet-setters' – have some of the most luxurious property to be found anywhere in the world." With something for every overseas property purchaser to buy, it's time to heed the Greece's invitation.

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For further information:
Aegean Blue
Crete Homes
Cybarco

Related articles to help you buy property in Greece:
Living the Greek dream
Greek property: Finance and development
How to buy a house in Greece

Article published July 2007