WIRE MAGAZINE MYKONOS - OUR VIEWS ON THE MARKET OF MYKONOS
Today Mykonos’ market prices are next to the values registered in the pre-crisis period and thanks to its fast-growing market they are predicted to overcome the previous ones very soon.
Mykonos condition is a real exception if compared to the general Greek one. In fact, in some locations of the Country prices reduced by half respect to 2007. The Greek Real Estate Index saw a drop of 43.2% between 2008 and the end of 2017. In 2018 the index seems to have found its balance; it has stopped decreasing but it has not yet started to grow. Mykonos’ international profile and its position have always let the island to have its own market – independent from the national one.
The political situation of the island has not influenced negatively the market’s trend in fact, in the first half of 2018 international buyers (according to their residency) represented the 65% of the total demand. The positive aspect of this great datum is that some local investors are ex-international buyers who have moved their residency in Mykonos and have started investing in real estate. It could seem a speculative demand – since many investments in Mykonos are related to its renowned international fame – but actually there are strong fundamentals which will lead to a further growth. As we have mentioned before, today prices in Mykonos have reached the same trend as 2007. Their steady growth has been given by some main aspects. First of all, tourism in Mykonos increases more and more; by the end of 2018 more than 2.5 million people are expected to visit the island. The internal policies are aimed at reducing the seasonality of the island in order to turn it into a “top destination” throughout the year. Currently, some projects for the development of new maritime and air routes are on work too. Finally, even though - at the moment - getting new permits to build new residential properties is quite tricky, once the property is rented the yield is going to be high.
Today the net income return for short-term rentals is over 6%. This is a European record which is not going to decrease in the near future.
In Mykonos – as in all of the other Greek islands – prices vary depending on the location of the property. In the main urban centers the average price is 4.102€/sq.mt but if we take into consideration luxury properties such as villas with a sea view, prices can be over 10,000€/sq.mt. As a consequence of the above and the macro-economic situation of Greece – which is expected to improve – we can see that the outlook of the real estate market in Mykonos is positive and will stay as such for the next five years. Taking into consideration the tourism in the island as well, the cap rate will be over 5% and the capital gain around 30%.