Demand for homes outpaces supply in Crete

Demand for homes in Chania and Heraklion on the island of Crete is outpacing supply despite the uncertainty created by the pandemic, say consultants Danos in a market report.

In a note on real estate on Greece's biggest island, Danos says that residential property is the asset class hurting the less from the downturn. With many in real estate getting ready for a post-pandemic bounce, the market for beachside holiday homes and villas in Crete looks poised to benefit quickly from the improved economic conditions.

The report points out:

"Demand for housing in Chania and Heraklion is consistently higher than the supply and this will not change easily. Temporarily some buyers may postpone or stop their searching as a result of the uncertainty. Even if many new houses enter the property market in the coming months, they will simply meet the long-standing demand. If there is a pressure on prices, it will mainly concern expensive properties, i.e. either large houses or those that are priced above the average €/sqm.

The current health crisis creates uncertainty in the residential market, as buying interest from abroad has been temporarily halted, while the suspension of the country's mortgage offices for the period from mid-March to the end of April 2020 contributed to the further weakening of the market. The effects of the crisis are expected to be reflected in both house prices and rents, with significant variations at a local level. In the short term, it is estimated that the market for apartments, especially in urban centers, will come under pressure, mainly due to the reduction of interest in short-term rental with a tourist character."