by David McGinty-Hodges
With the 2007 summer season in full swing, a great many people are contemplating the purchase of holiday homes around the Mediterranean. Whilst established markets such as Spain, France and even Italy, as well as a number of untried ‘hotspots’ are of course drawing a lot of attention, a growing number of prospective holiday home owners are looking somewhat further afield to find the perfect location for their second home. In this article, we take a short look at the various real estate markets dotted around the Mediterranean.

First of all; what about the established markets?

SPAIN: According to the sheer number of properties sold, Spain has headed the list of Mediterranean real estate hotspots for quite a few years now. In recent times however a number of land-grabbing and corruption scandals, along with an increasing number of dissatisfied clients and accusations of excessively inflated prices, have taken their toll on potential buyers of Spanish properties. Furthermore, many analysts now feel that Spanish real estate has ‘had its day’ and the massive capital gains seen in past years are not to be seen again.

FRANCE: Whilst Spain is seen by many as the Mediterranean’s favourite destination for British louts, the French coast has earned something of a badge of exclusivity; a reputation which is reinforced by resorts such as Antibes, Cannes, Nice and St Tropez. As with all real estate markets, exclusive areas do come with a hefty price tag and so, although the south of France is without a doubt a fabulous location for your next holiday home, the local property prices tend to restrict the market to clients with somewhat larger budgets.

ITALY: Although not as popular as either Spain or France, properties in Italy have nevertheless attracted a certain amount of attention in recent years, with village properties in coastal villages coming top of the wish list with many prospective buyers. As the number of foreign homeowners has increased however, local residents seem to be developing a growing antipathy against their neighbours from abroad. So, although it is still possible to pick up a character property for a song in Italy, you would be well advised to research your chosen area for negative sentiment before committing to a purchase.

But what about the many untried property markets around the Mediterranean.

Whilst I am aware that the country I am about to mention does not in fact have a Mediterranean coastline, it does serve as an absolutely outstanding example of untested property markets in the general region.

BULGARIA: 2006 saw the emergence of Bulgaria as the ‘latest real estate hotspot’, a development which sent a large number of (mainly British) buyers flocking to the country in search of a prime investment on a new market’s ground-floor. With prices seeming almost too good to be true, many visitors were convinced into buying off-plan homes without first researching local laws or even trying to ascertain the property developer’s credibility. Unfortunately, as is almost always the case with untested markets, the ‘Vanguard of Homebuyers’ paid the price for an overall lack of care. Not only was the Bulgarian market dotted with ‘Phantom Developments’, that is to say off-plan developments specifically advertised to collect buyer’s deposits without any intent of ever constructing the property in question; Bulgarian property law also provides a veritable minefield for foreign real estate buyers. In the end, a great many investors lost an awful lot of money through lack of proper research.

The thing about untested real estate markets is that they are - well - untested, and the first wave of investors invariably acts as guinea pigs for future buyers. Therefore, it is almost always better to sit out the initial rush to a new market and wait a short while to ‘see what develops’, so to speak.

So is there actually a middle-ground where Mediterranean real estate is concerned?

One of the truly viable alternatives in this case is presented by the Republic of Cyprus. As a former British Crown Colony and full member of the European Union (since 2004), the Republic provides one of the most comprehensive sets of laws for the protection of property buyers anywhere in the Mediterranean. Furthermore, property prices in Cyprus are still substantially lower than they are in Spain or France for instance and, although this may seem like a relatively minor point, the natives are amongst the friendliest to be found anywhere on the planet.

So, if you are looking for a new home in the Mediterranean sun, the Republic of Cyprus is worth serious consideration. Why not come and see for yourself?

David McGinty-Hodges has lived in the Republic of Cyprus for a number of years. During this time, he has worked as a property consultant and market analyst. According to current projections at the time of writing this article, properties in Larnaca provide by far the best scope for medium and long-term returns anywhere in the Republic.

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