Sun and games in Greece

With world attention focussed upon Athens this month, Greece is certainly basking in the spotlight. But eyes are also closely watching another Greek event, the property market, which looks set to boom.

With world attention focussed upon Athens this month, Greece is certainly basking in the spotlight. But eyes are also closely watching another Greek event, the property market, which looks set to boom.

Traditionally, Greece has appealed to a certain type of buyer and restoring a typical whitewashed village house has long attracted Grecophiles intent on a labour of love. But a recent report by the research company Global Insight predicts price rises of 6.5 per cent a year up to 2012, thanks to the arrival of major developments, which are now attracting investment buyers to the mainland and to the islands.

Investor Christos Petrides was born in Cyprus and lives in London where he owns a £2m property portfolio in the Capital and Hemel Hempstead. Years of rising UK interest rates and falling returns have prompted him to invest in Greece. Two years ago Petrides bought two city penthouse apartments in Athens and has recently added a beachside villa on the island of Paros to his portfolio: "With the Olympic games in Athens this summer I think the publicity will generate a huge increase in the property market, not just in Athens but throughout Greece and its islands."

Petrides believes that his penthouses have already doubled in value in part because Greece's entry into the EU means that EU nationals can now live and work freely in Greece and many choose Athens for its amenities and infrastructure.

Buying on Paros does not, on the surface, seem to have the same draw. Better known for its crystal clear, turquoise waters and miles of deserted coves and beaches, Paros can only be reached via internal flights or ferry, yet Petrides bought villas at Leptos' Golden Coast Beach near the tiny harbour of Drios and says it was the combination of location and investment potential that appealed: "Work has started, which will open Paros airport to international flights but the location here is very special. It's right on the beach with unobstructed views so the sea view alone is priceless."

Two- and three-bedroom maisonettes and villas are available, all designed in traditional Greek island style, with prices starting at €172,000 (£115,000). Petrides bought his property through his investment company but, as his family have now started holidaying at the villa, he admits that realising his investment may prove elusive: "It really is a beautiful island with a lovely relaxed pace of life so this is one property that I never intend to sell."

Leptos Estates has a 40-year track record in Cyprus but it sees huge growth potential in the Greek islands. "There just hasn't been the same sort of development of the scale that we have seen in Cyprus," says marketing executive Andros Kourouna. "There are many small-scale developments or one-off properties but there's been very little in the way of major development and especially of the 'total resort' concept that we're planning." Future developments include Crete, the largest of the islands, at Pyrgos, just 10 minutes from Chania, where a mix of beachfront villas and apartments with on-site health club, gym, communal pool and club house start from €135,000 for one-bedroom apartments.

Crete remains the most popular destination for Brits (developer Hellenic Homes claims to sell a property a day to UK buyers) but Leptos also has a scheme planned for the island of Santorini, which has so far seen little new build. Individually designed two- and three-bedroom villas, just 200 metres from Monolithos, one of the island's best beaches, and 3km from Santorini's international airport, are on sale with prices starting at €125,000 for two-bedroom detached villas and up to €201,000 for three-bedroom homes. All properties have the option of private pools.

Crete Property Consultants' Oonagh Karanjia has always had a "small hard core" of investment buyers but the bulk of clients want "traditional homes for personal use although the picture is changing. We now get many more requests for apartments. Prices and over- development in places like Cyprus and Spain are persuading people to look in Greece instead, which hasn't happened before." Karanjia doesn't believe that Greece will suffer a similar fate: "Each island has its own rules, like everything being painted white, and the building rules have recently tightened."

Current regulations specify plot sizes of 4000m
2 to build a property of 200m
2 but Karanjia cautions against buying in very touristy areas: "Just go a couple of kilometres inland and you can buy something for half the price. There are hundreds of unspoilt villages in Crete and amazing bargains to be had." Currently on offer is a two-storey stone house in the village of Achladia "with fantastic sea views" for £52,600 and, in the village of Limnes, a former café with three rooms plus bathroom "in reasonable condition" is for sale for £35,350: "It would suit someone artistic who wants to set up their own business and live on the premises."

Non-Greeks have only been allowed to buy since 1991 but red tape has infamously been problematic along with disputes over title. Properties owned by generations of Greek families can be fraught with difficulty for British buyers. Obtaining a title deed that states clearly who owns the property is vital but Karanjia describes the current buying process as pretty straightforward. "It's constantly improving and the new government has promised to get rid of some of the paperwork making it simpler than ever, but we always advise using a registered English-speaking lawyer."

Crete Property Consultants has recently begun selling on the island of Kythera just south of the Peloponnese and reached by daily flights from Athens in the summer, or by ferry. The island has many ravines, waterfalls and beaches of red and white sand but is unknown as a British holiday destination. Karanjia sees great potential and points to two stone houses requiring renovation in Aghia Annastassia. Set in 2,000 sq m of olive groves and with breathtaking sea and mountain views, they are for sale at £70,600. "They are amazing. I'd be surprised if you could get those kinds of views anywhere in Crete for that amount."

* Once an agreement is reached, a contract is drawn up to include price, completion date and any other relevant information, upon which a deposit of 10 per cent is payable. The contract should include a clause specifying the return of your deposit should legal title prove unsatisfactory.

* All contracts are drawn up in front of a public notary, where the buyer's lawyer must be present.

* Before signing the final contract, buyers need a Greek tax number, which must be included within the contract.

* Notary's fees are around 1-2 per cent of the property's value as are lawyers' fees. Buyers must allow between 15-18 per cent above purchase price to cover all of the extra costs.