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Real Estate Chania investigates the ways to increase the competitiveness of the Chania property market by evaluating the scope and diversity of existing and potential real estate investments; providing guidelines for their conversion into reliable information based on research of current and future market trends; and, addressing the local and national challenges of housing market uncertainties and lack of services diversity with the ultimate aim of increasing property market reliability, mitigate conflicts and real estate investments.
Chania Property Market: Prices
Even if you compare one real estate market to one that is located only a few kilometers away, they can be much different. Real estate markets become drastically diverse once you start comparing a real estate market in one municipality to another, or even more drastic, from one region to another.
While most of the attention paid to house prices focuses on the big markets of Athens, Thessaloniki and the Aegean islands, there are other cities in Greece. ARENCORES, a Chania based real estate firm, looks at four smaller markets across the island of Crete that are being affected by the current economic conditions.
It may come as a surprise to many investors that for several years the hottest real estate resource economy in the island wasn’t Chania but Heraklion and Lassithi. Propelled by a boom in tourism and billions in agriculture and infrastructure investments, the economy of Chania has grown roughly 50 per cent since 1990. Jobs and wage hikes quickly followed.
Real estate investors from other provinces and as far away as Israel poured into the market, buying up holiday homes, hotels and other commercial properties. Home prices boomed, more than doubling since 2000 and rising 35 per cent in one year through 2007 and 2008.
Such furious growth was bound to come to an end eventually. Greece’s debt crisis and the associated uncertainties dramatically slowed Chania’s (and Crete) economic growth. Unemployment hit 24.8 per cent in December 2015, the highest level since 2013.
Several shops have closed, while the bulk of construction has finished on several major infrastructure projects, meaning less demand for construction workers and civil engineers. Several restaurants have shut down and the closure of a large number of Chania real estate firms have left an abundance of retail space.
The slowdown has effectively cooled Crete’s overheated property market. The volume of resale home sales across Newfoundland fell 45 per cent in May 2015 compared to a year earlier, while average prices dropped 24.6 per cent.
“The heat went out of the housing market,” says real estate agent and civil engineer Maria Gkika. “Multiple offers from foreign real estate investors have slowed down. We were down to where properties in Chania old town were selling in a month. Now we’ve gone back to a normal real estate market, where you put a house in Chania Old Town for sale and 90-120 days later it sells.”
The Situation & Trends
If Athens’s housing market serves as a proxy for the health of the country’s real estate industry, then Chania’s real-estate market is perhaps the best gauge of the strength of the Cretan real estate market.
These days Chania property market appears to be in the midst of a remarkable turnaround. Home sales were up nearly 30 per cent in the first quarter of the year. Average resale prices are up 5 per cent from last June, making Chania property market one of Greece’s hottest real estate markets.
“Any decent home in Chania Old City in particular is selling fairly quickly and is getting multiple offers from domestic and foreign investors,” says Maria Gkika. “A lot of them are going over the asking price.”
The property market in Chania, Crete is being helped by a trifecta of favourable economic developments: lower interest rates, tourism industry booming and uncertainties mitigation. Restaurants, small hotels and hostels are staffing up and new players-real-estate investors are now involved in several real estate projects in Chania property market.
Many of the investors who had been sitting on the fence over fears and because of the uncertainties are starting to return to the Chania property market. Mrs. Gkika has also seen an increase in foreign investors looking to buy property in Chania that remains one of Greece’s most affordable and promising real estate markets.
The Real Picture Behind Chania Property Market
Yet there are plenty of reasons to be cautious about whether the jump in home sales in Chania property market is really a reliable indicator that the city’s economy is in the midst of a resurgence.
The housing market has seen its share of false starts in the past. Commercial and residential real-estate sales have picked up this year (2018), Maria says, but not nearly at the same pace as the housing market before 2008, and the city still faces new challenges.
The road network that connects Chania with the other major cities of Crete is still problematic and the accessibility routes to and from other major cities in Greece and abroad are also limited. “It’s certainly not that more real estate investors have come into Chania property market,” she says.
Bank of Greece recently research points out that home prices have fallen to among the lowest in a decade. The shortage of homes for sale is some areas is helping to drive up resale prices.
Still, Maria thinks this time the housing market in Chania may have finally started to turn a corner to the future and growth. “Chania went through its real-estate correction two years ago and now I think we’re one of the safer real estate markets in Greece,” she says.