Second home market shines on Spanish, Greek islands

Second home market shines on Spanish, Greek islands
More property buyers looking for an island home in Spain and Greece amidst pandemic.

The second home market on the Spanish and Greek islands is performing strongly as the pandemic pushes more buyers to secure their own quiet access to beaches, away from busy resorts.

According to Engel & Volker CEO, Sven Odia, working remotely has also played a key role in boosting this segment of the property market, with vacation homes in Portugal, the French Riviera and North Sea also popular. He goes on to add:

Spanish islands much sought after

Demand for second homes in Spain increased steadily throughout 2020 and 2021. International buyers from Northern and Central Europe continue to show great interest in properties on the Balearic and Canary Islands.

Mallorca remains one of the most sought-after islands, with German clients accounting for 63% of purchases, followed by the British (12%), Scandinavians (6%), and the Swiss (3%).

The island’s capital is benefiting from major investments in modernisation projects, as well as the realisation of more environmentally friendly mobility concepts. This is enhancing the overall appeal of Palma de Mallorca, especially among clients looking for a sustainable home in the Mediterranean with long-term potential and a high quality of life.

The most expensive and consistently sought-after locations on the island include Port Andratx, Santa Ponsa, Bendinat, Portals and Son Vida. In 2020, villas in the upmarket harbour town of Port Andratx reached average asking prices of 4.3 million euros. In the southwest, luxury properties with sea views that combine modern architecture and Mediterranean elements are particularly sought after.

Families and business professionals are increasingly drawn to the island all year round, thanks to a wide range of international schools, excellent modern medical care and communication technology. The trend towards permanent residency in the most exclusive district of Palma is also evident when it comes to clients looking for a home in Son Vida. This luxury villa community with its renowned golf courses draws both affluent families and couples, and recorded average asking prices of well over 4 million euros last year. The higher demand includes all other areas of Mallorca, for e.g. the west, the southeast and the center of the island.

The Germans and British also dominate the real estate market in Tenerife with 60% and 20% of the purchases respectively.

Ibiza also saw an increase in demand for properties, especially in rural areas of the island. Spaniards represent 22% of the buyers, followed by the Germans at 20%.

Interest in Greek islands "skyrockets"

Greece and its islands are one of the most attractive destinations in Europe. Over the past year, demand for real estate in the Greek islands has skyrocketed. International buyers, especially from Central European countries, continue to invest in second homes in Greece.

Interest in properties on Crete, Corfu, other islands and the coastal areas of the Peloponnese has remained very high.

Exclusive villas near white sandy beaches are especially popular on Mykonos, Paros and Rhodes. A detached home can cost up to 8 million euros in Paros and 4 million euros in Rhodes. Apartments in highly-favored areas of Rhodes reach a maximum of 6,000 euros per square meter. Prices are expected to remain stable throughout 2021.

Côte d’Azur

The French Riviera is known for high-end real estate and picturesque coastal villages. Since the number of properties in the region is extremely limited, the Côte d’Azur stands out as an exclusive destination for wealthy Parisian clients and international buyers. Most cross-border buyers come from Italy, Belgium, Switzerland and Germany. Approximaltely 50 percent of buyers in Cannes are from abroad , while the percentage of foreign buyers in Saint-Jean-Cap-Ferrat is nearly 75%.

The highest priced villas with lush gardens and pools can be found in Saint-Jean-Cap-Ferrat, where properties sell from 4 million euros up to several hundreds of millions. Less extravagant villas can nevertheless be found for 2.5 to 50 million euros. In Cannes and Saint-Tropez, prices for some luxurious houses and villas were as high as 35 million and 30 million euros respectively in 2020.

Throughout the pandemic, many wealthy buyers were investing in properties on the Côte d’Azur to live in the South of France all year round.

Prime locations in Portugal

Lisbon has also seen a significant increase in demand for residential properties since the start of the pandemic. 65% of investors in Lisbon are Portuguese, while the remaining 35% are international buyers from France, the UK, Brazil, Germany, and China.

Lisbon’s pleasant climate makes it ideal for anyone looking for properties with a balcony or garden. Prices are still moderate in comparison to other European cities, and government investment incentives like the so-called “Golden Visa” attract foreign buyers.

An increasing number of young buyers are heading to Lisbon, especially as the city is establishing itself as a hub for entrepreneurs and young talents. The most sought after neighborhoods include Belém, Parque das Nações, and Chiado.

Vacationing at home in Germany

The North Sea also offers attractive islands for anyone looking to purchase a second home in a peaceful location on the water. The East Frisian and North Frisian Islands off the North Sea coast never cease to impress with their untouched natural landscapes and pristine beaches. Sylt, for example, is one of the locations with the highest real estate prices in Germany. A single-family home can cost as much as 15 million Euro. Anyone looking to purchase a vacation home on the islands can pay as much as 19,000 Euro per square meter. Since the summer of 2020, demand for these properties has never been higher.

Demand in Schleswig-Holstein is so high that it’s becoming harder and harder to find available properties. Property prices have been climbing steadily in Tegernsee since the start of the pandemic in 2020. The highest prices for premium vacation homes can reach as much as 20 million Euro.

Holiday homes in Germany are becoming increasingly popular with younger buyers as well. Good financing options and low interest rates make purchasing property more attractive for young families. Some are acquiring property together with other families and sharing the home throughout the year. This affordable option gives people the opportunity to work and live with their children in more desirable locations.

Germans—especially residents of bigger cities like Berlin, Munich, and Hamburg—are continuing to show interest in buying properties within Germany. By choosing locations nearby, they are reducing travel time and making it easier to escape to the countryside for shorter stays. The most popular places are those that are easily accessible from the cities.