High yields on the Greek islands
Luxury vacation homes in iconic areas of Greece have by far the highest yields in the Mediterranean. This relates to the returns from renting them compared to purchase prices, which makes Greek island real estate exceptionally attractive.
It is therefore not surprising that houses in Paros and Mykonos have higher yields than residences of the same size and characteristics in Cannes, Saint Tropez or even Capri. In recent years, despite the pandemic, the holiday home market in Mykonos has steadily evolved from a very promising real estate niche to the most dynamic and active section of real estate.
For a sixth year, Algean Property has conducted a survey of 30 popular Mediterranean destinations, recording all the latest trends and insights into the luxury holiday home market. Once again, for the sixth time, Mykonos, with its comparative advantages and strong brand, remained the top destination with an average gross return of 7.4%. The increase in demand led to price growth, while rents increased at a slower pace, which explains the relaxation of yields compared to 2019 (8.2%).
Paros reached 7.1% as it is one of the destinations that managed to increase its rate of return from 2019 (6.5%). Although prices have increased, the increase in rents has exceeded the increase in sales rates, thus closing the gap with Mykonos.
On neighboring Santorini, sales prices and rents showed a slight increase compared to 2019, although the average return rate remained the same (6.3%).
On the other side of the Mediterranean, we see that, despite the pandemic, the prices of high-end vacation homes have remained stable overall, or even increased somewhat in value in the 30 places examined. As a result, returns were generally lower than in 2019. Rising demand in luxury destinations in particular and in the luxury property sector in the market has resulted in higher property prices and lower returns for investors.
Demand in all Mediterranean destinations has soared during the pandemic, with Greece, Spain and France leading the way: “Given the low interest rates of recent years, buying a luxury holiday is a major investment opportunity,” explains Algean Property.