By Nikos Roussanoglou

Greece is the dominant European market for investors looking for high returns in tourism-related luxury property, new market data have highlighted. Nine of Europe’s ten leading investment locations, in terms of high rates of return on upscale holiday homes, are Greek destinations, according to an annual report by international property consultants Algean Property. Algean used 250-square meter luxury holiday homes promising rental income over 12 weeks during the summer season as the standard measure for its latest study.

Mykonos, Santorini and Paros held their positions as the leading European destinations for luxury holiday accommodation investors. Mykonos offers an 8.4 percent investment return, while Santorini and Paros registered rates of 6.4 percent, according to the market report. They were followed by six other Greek destinations, Rhodes, Skiathos, Elounda, Porto Heli, Halkidiki and Hania, in that order.

The profit to be made on property in Hania is on a par with the yields offered by investments along Croatia’s Dalmatian Coast, in Tunisia, and Nice, southern France. These destinations currently offer investment returns of approximately 4.8 percent, the study found. More Greek destinations featured lower down the list. Cephalonia was in 13th position with an investment return of 4.1 percent, followed by Corfu on 4 percent. The Athens Riviera was ranked 23rd, promising investors returns of 3.4 percent.

Relatively stable property values for Greek luxury holiday accommodation over the past year and the fact that rental prices have remained elevated or in some cases risen, in turn contributing to high yields, were cited as the key factors behind the dominance of local properties in this investment market.

Holiday accommodation prices in Greece have dropped by an average of around 30 to 40 percent since the start of the recession at the beginning of the decade, helping boost global demand for the country’s tourism product. The results of Algean’s study also showed that the Greek summer tourism season has extended to include the month of May. Tourism-related property rental demand in May has increased in recent years.

The majority of investors eyeing or buying Greek holiday accommodation properties hail from the US, Australia, Europe and the Middle East, the study found.