Rhodes holiday homes to rise amidst broader building lull

Rhodes holiday homes to rise amidst building lull

The stock of holiday homes on the island of Rhodes is set to rise in coming years due to a rise in tourism resorts but broader building activity in the sector remains low, Algean Property said Wednesday.

In a report on holiday homes on islands in the southern Aegean, Algean points out that Greece's construction industry froze due to the country's debt crisis and a lack of liquidity, resulting in no major changes in the stock of holiday homes.

In the last two years, some individual projects have begun developing, though the volume still remains low, said Algean.

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Rhodes is among Greece's popular tourist destination that is set to see the biggest change in the quality and quantity of holiday homes and villas on offer. Rentals on the island are not as developed as elsewhere in the region, yet the market "possesses a certain dynamic one cannot ignore," said Algean.

Holiday home rentals in Rhodes offer a gross average rental yield of 5.6%, versus top performers Mykonos (8.4%) and Santorini (6.4%). Demand for luxury real estate on these two islands has outstripped supply in recent years with most homes up for sale privately owned.

"No new developments begun the last few years in Rhodes, resulting in little changes on the island’s holiday home stock," said the report.

"However, upcoming integrated tourist resort projects on the island include the construction of holiday homes within their premises, thus increasing the holiday home stock’s quality and quantity," it added.