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Everything in life has two sides. Whether you are interested in buying or selling a property in Crete you need to know what is going on in the market today. Many people have waited for the prices to fall before they buy. Some have been justified by this since few developers announced special offers with 10% deductions for the months of August and September. The purpose of this article is to demonstrate that for the majority, waiting has been more of a loss rather than a benefit.
For example the deduction of 10% was not given to all properties but primarily to properties that have some disadvantages as for example not being in a highly popular location. Or to apartments that are located on the 3rd floor of a building without an elevator.
Other companies or private individuals offer discounts to interested buyers offering cash. However for real estate agencies it is not unusual to negotiate lower prices when cash is involved. So this is not a result of a crisis in the market but common practice.
Another issue is the mortgages or housing loans in Greece at the moment. According to one of Athens most reliable national newspaper on Sunday 14th of September 2008, it is reported that banks now avoid offering finance for more than 60% of the property value. Meaning, that if one wants to buy a property valued at 200.000 Euros they will only receive funding for 120.000 Euros. The remaining amount of 80.000 Euros must come from their own funds.
Therefore, it is harder for anyone that does not have cash to come to Greece and buy a property today. When up to August of 2007 people received funding for up or even more than 90% when buying a property.
At the same time, interest rates have risen significantly when compared to the first half of 2007. For example for a mortgage or housing loan of 150.000 Euros that will be paid over a period of 30 years the monthly payment is now over 800 Euros.
So whoever does not have a significant amount of cash and waited for the prices to fall has probably lost more than what they have gained from delaying their purchase. For people that sell property this also means that a great percentage of prospective buyers are simply gone. So if they were asking for higher than normal prices or rejected reasonable offers in the past they will probably soon regret it.
However, it must be noted that when the location of a property is considered of high demand and the specifications are of high quality, then the prices are unlikely to fall and more likely to rise. Published reports have proved that even in areas around Athens where 100.000 new properties are available for sale - which is considered an extremely large amount of properties - in 2008 in some areas prices have risen by 15% when compared to 2007: Exactly because of their location.
This article is not meant to make you feel bad for your previous decisions but to protect you from losing money in the near future. And delaying your purchase further can make you lose more money.
For the past 3 months the national press in Greece has offered contradictory information regarding the programmed increase of the objective values of properties in Greece by 30%. At this point it must be clarified that the objective value is the value of each property according to the Greek State, which is usually lower than the commercial or real value. All purchase costs such as the notary and lawyer fees or the transfer tax are calculated according to the objective value. So if the rise of objective values materializes from the 1st of January 2009 then you will pay higher purchasing costs.
This is why it makes sense to buy now, within 2008, without risking increasing the cost of your purchase by waiting for 2009.
Andreas Batakis has lived in Greece, Ireland and Cyprus, acquiring a Business Administration Degree in Greece, an International Marketing Diploma and a Bachelor of Science in Human Resource Management in Ireland. He is also a member of the UK based Chartered Institute of Personnel and Development. Andreas has extensive experience in helping people from all over the world to locate a home in Crete and is a founding member of the independent consultancy Talos Properties.
Talos properties was created in order to guide and protect all of you who wish to acquire a property in Crete via offering you a wide range of choices as well as professional advice in property related matters. For more information please access the Talos Properties website at: http://www.talosproperties.com