Should I Pay $64,000 for a Mediterranean Ruin?

Friday, Nov. 30, 2007
Crete, Greece

Read more about Greece in International Living Postcards--your daily escape

From the far side of the narrow main road, my back pressed up against the building opposite to get as much perspective as I could, I looked at the “house” expecting to see a donkey’s tail swishing through the gaping hole of the doorway. Except most donkeys would be more particular. For one thing, they would probably prefer a roof...especially as this was a mountain village likely to be dusted with snow come Christmas.

I walked through the door-less jagged opening, avoiding a rusted can that might once have held olive oil. The dried up stems of wildflowers scraped at my legs. I stretched out my arms to try to get a sense of how big the room was, difficult to do with the overgrown vegetation. Vines grew through the space where a window once was. Beyond, I noted, there was a view of olive trees and distant hillsides.

“Just 45,000 euro ($64,000),” the realtor told me. “This is the last house in the village available for restoration.” It was just one room but apparently there was once was a second story. “You can build up.” He brushed aside the vines and poked his head out the window space. “And see? Stone patio.” Under the weeds, in the flat area behind the ruin there were indeed a few flagstones, but whether they had been put there by the previous owners or the ancient Minoans was unclear.

“And those olive trees, all yours…down in the valley this house would cost you 60,000 euro ($86,000) …easy.”

If this had been the first wreck I’d visited, I would have laughed it off. But for the briefest of moments, I found myself doing calculations in my head. Pre-existing second story, that might make planning permission much easier…I wonder if the patio could be passed off as the foundation of another pre-existing room, the view was good, the village picturesque…

Greece, and especially Crete, has a limited number of old properties which appeals to foreign buyers. If a property still has a single wall standing, it is a viable candidate for renovation. This is why many foreign investors are getting their hands on these ruins.

Because the real estate world in Greece has changed dramatically over the past few years (with the EU cutting some regulations and restrictions), more and more people are buying homes in Greece. Now is a good time to purchase property as the Greek mortgage market has opened up directly to foreign investors.

If you want a new house built in the old style, using traditional materials, the process is easier but you still pay a premium for charm. And if modern appeals to you, most builders are providing turnkey houses in the 130,000 - 150,000 euro ($186,000 - $215,000) range. Since this is the most competitive area for builders right now, some relative bargains may be available for the next several years, but after that, look for prices to appreciate as all the easy-to-acquire land will be used up.
Property purchases in Greece can be complicated as it is not uncommon for 10 or 15 separate relatives to each have a fractional claim on a piece of land, and beyond that, someone else may own part of the water rights or the produce from the olive trees. On the one hand, this has protected Crete from many of the vast developments common in other parts of Europe, but for the small investor who just wants to build a house, it can sometimes make it a challenge to acquire land. If you fall in love with a property that is not formally listed for sale, or that an acquaintance says that they might want to sell, it's wise to be prepared for complications:

* Choose a property that is listed with a realtor--land title issues will be already resolved.

* Consider buying a built-to-order property. These “turn-key” houses usually have traditional down payments and mortgages available, and the builder has already taken care of any outstanding issues about the land. They are often built in small settlements of three or four houses creating a comfortable community for the new expat.

* Keep an eye out for renovated properties for sale by expats--some of their houses (bought over the past decade) are gradually re-entering the market and are usually ready with up-to-date plumbing and amenities.

Ultimately, while the purchase process can be complicated, the goal is simple: to be able to live on Crete, with its great natural beauty, healthy food, and the strong likelihood of appreciating real estate prices over the next few years.

I believe that the remainder of the year and early 2008 is the best time to invest in Crete.

deTraci Regula
For International Living

Related articles:

- A Second Home in Sunny Crete?
- Six Things You Should Know Before Buying a Property in Crete
- Your Own Second Home in the Sun For Less Than $100,000