BEAT THE MORTGAGE SQUEEZE -
CORFU PROPERTY STILL A SOUND INVESTMENT
DESPITE TIGHTENING OF MORTGAGE FACILITIES
by Steve Whitty, owner of Guilford Real Estate - Corfu, Greece
You have been planning a move to the Med forever. You've come to Corfu on holiday year after year; you love its ambiance, its people, its climate, its slower lifestyle. You've met others who have successfully made the move, and you have finally taken the decision to relocate once and for all to the Emerald Isle. You've saved your money for years, you have a steady and secure income in place, you've simply been waiting for the right time. And just when you think you are finally ready to make the change, along comes the so-called 'credit crisis'. Property values in the UK begin to fall, the markets go into decline, and it is all over the news that banks have stopped lending. Is it time to reconsider? Do circumstances demand that you put your long held dream on hold? Or maybe make an alternative plan? Not necessarily...
It is often said that 'timing is everything', but it is also well known by savvy investors that every downturn also offers unique investment opportunities. This is especially true in the real estate market. It is also an axiom that only three criteria apply when purchasing real estate: 'Location, location and location!' So how can a move to Corfu still be possible even during these uncertain economic times?
Amidst all the hyperbole forecasting market crashes, home value declines, recession and even global economic collapse, life goes on. Our hopes and dreams are as vital today as they were yesterday. Even as economic realities play a part in the decisions we make about our future, so too must we fully embrace our hopes and our dreams, because the two things we cannot reconstitute are time and opportunity. Once lost, these two precious commodities are gone forever. And perhaps these troubled economic times are not as dire as the news media portrays them to be. Maybe a clever investor full of enthusiasm can still see the glass as half full rather than half empty. So let's take a realistic look at both the real estate market and the lending market on Corfu to answer the fundamental question, 'Should I risk a move now, or should I wait for the credit markets to ease?'
Availability of Mortgages on Corfu
Greek banks are still lending to EU member individuals. Sensible (but not prohibitive) criteria are used to determine mortgage worthiness. At present, as much as 80 per cent of the purchase price is available to qualified borrowers, even up to 40 per cent of last year's income divided by 12 as a monthly repayment. Competitive interest rates between 4.5 per cent and 6.4 per cent fixed or variable are currently available plus combination offers. Extensive bank investigation of the property value and title are routinely conducted for the client's security, as well as for the lender's protection.
Excellent Investment Opportunities
The old parts of Corfu Town, which are now a UNESCO Heritage Site, have shown excellent appreciation. This is very likely to continue as the UNESCO rules concerning preservation and authenticity are enforced. Demand for both apartments and for shops exceeds supply. It is forecast that this trend will not only continue but, in fact, intensify.
Other areas of Corfu such as Kommeno, Gouvia and Kondokali have a proven track record for substantial growth and appreciation over the past 10 years. Example: a Kommeno villa built in 1999 for Euro 475,000 is now marketable at Euro 2,500,000. This is 5.26 times the original purchase price over 9 years!
Building Regulations
Huge high-rise developments are difficult if not impossible to build on Corfu. Therefore, the island remains green and is not over crowded, which makes it ideal for holiday residences, retirement homes and permanent homes.
Rental Income
Corfu is a growing university town which puts a demand on apartment accommodation for students. Corfu's holiday villa market is thriving despite the global financial downturn.
Supply and Demand
Generally supply exceeds demand. Sellers set an 'asking price', but that price can usually be negotiated down by as much as 20 per cent.
On occasion, a 'need to sell' as opposed to a 'want to sell' property can be located. Buyers must be prepared to respond quickly to take advantage of these few and far between cases.
Currency Exchange
The UK Pound is currently low against the Euro, but hopefully bottoming out. By using companies like SmartCurrency which is based in London who specialise in exchanging smaller amounts, there are ways of saving up to 4 per cent when exchanging Pounds for Euros. Guaranteed better rates than Commercial Banks.
So there you have it; its not impossible, not at all hopeless. Rekindle those dreams you have long nourished of moving to a beautiful island in the Med. Corfu remains as it has always been - an emerald in the blue Ionian, an oasis for those weary of high stress lifestyles, and even in these challenging economic times, an opportunity for savvy investors. We are high on Corfu!
Corfu Real Estate Advice
Corfu Real Estate Advice - Beat the Mortgage Squeeze - Corfu Magazine - Vol. 4, No. 2, December 15, 2008
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Corfu Airport Code: CFU
More Corfu publications:
Sunset Hill
The developer has carefully selected a well contoured piece of land close to Paleocastritsa and over looking the village of Liapades. Here will be built 12 houses in two different styles. Type "A" will be a bungalow and Type "C" a double storey structure. The surrounding area is beautifully green. There are a variety of indigenous trees and undergrowth as well as olive, Cyprus and fruit trees. The site over looks hills and mountains on which are dotted small villages and there is a distant sea view towards the West from three or four of the units situated on the top section of the property. A beautiful quiet country environment.
Barbati
A modern complex of free standing holiday homes on the foothills of Pandokrato looking out over the sea at Barbarti towards the mountains of the Greek mainland. The views are excellent and there are many facilities close by such as shops, supermarkets, pharmacies, horse riding, mountain biking, water sports. The beach is no more than 200 meters from the most distant house - in some cases only 100 meters. Bus transport into Corfu town which is about 18 kilometers away.
A great opportunity to own your own holiday home with excellent rental possibilities.
