A sunset on Santorini, normally the most visited Greek island
A sunset on Santorini, normally the most visited Greek island © Alamy Stock Photo

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Tourists are slowly returning to Santorini, normally the most-visited island in Greece, known for its whitewashed villas, its perilously steep donkey tracks and its Instagram-friendly sunsets.

In 2018, more than 2m visitors arrived on this tiny island of just 15,000 residents. Overcrowding had become such a problem that last year authorities capped the number of cruise-ship visitors arriving to 8,000 per day.

This year, barely any tourists have visited as the coronavirus pandemic forced the island into lockdown and made international travel all but impossible. Now restrictions are slowly lifting and, on July 1, the local airport reopened for international visitors.

“They are arriving little by little,” says Barbara Danezi, who owns Estia Real Estate, a local property company. But those who do come will find the experience very different from that of previous years. Masks must be worn in shops and waiting staff are wearing plastic visors over their faces. “It is a little weird,” says Danezi. “But these are the rules.”

A five-bedroom villa in Akrotiri, in the south of the island. €1.75m, through Engel & Völkers
A five-bedroom villa in Akrotiri, in the south of the island. €1.75m, through Engel & Völkers © E&V
The swimming pool at the same property
The swimming pool at the same property © E&V

The island’s rising popularity with tourists has made it a magnet for property investors, who rent out their homes to holidaymakers on sites such as Airbnb. Last July, there were 4,180 whole-home rentals on Santorini listed on either Airbnb or Vrbo, according to AirDNA, which tracks the holiday rental market — an increase of nearly 180 per cent compared with July 2016.

Danae Tsakiris, an associate director at Savills in Athens, says property deals on Santorini were effectively halted while the island was in lockdown. Now, trips and viewings are starting up again.

But anyone looking for an investment bargain has so far been disappointed. “We have had opportunistic buyers who are looking to see whether sellers will feel more pressure to reduce their prices,” says Tsakiris. “But I don’t think this will happen. This crisis has not yet translated into a huge financial crisis.”

Line chart of Number of entire-home listings on both Airbnb and Vrbo showing Growth in Santorini holiday rentals

Greece has extended its ban on UK flights until at least July 15, and it is unclear whether the country can join the UK’s “air bridge” scheme — which allows British tourists to travel to certain destinations without a 14-day quarantine period on their return.

When holidaymakers do come back to Santorini, it will come as a relief to short-term lettings investors, who are braced for a difficult year.

Map of Santorini, Greece

Sebastian, who did not want to give his last name, grew up on Santorini, and owns three rental properties. By the end of the year, he expects bookings to be down about 66 per cent on 2019. “A lot of people are struggling because no new bookings are coming in,” he says.

He says lockdown was fun at first. Locals who would usually be busy preparing for the holiday season had a chance to relax. “In Greece, you count how many swims you’ve taken,” he says. Normally three swims might be a good tally for a summer. “People were saying: ‘We have already done 20 swims!’”

But when lockdown eased at the start of June, the mood changed: “That’s when the cancellations would kick in and you could actually start to feel the impact.” Shops and artists’ workshops remained closed, says Sebastian, with no tourists to buy their wares.

A three-suite ‘micro hotel’ in Oia, at the northern tip of the island, €1.3m, through Savills
A three-suite ‘micro hotel’ in Oia, at the northern tip of the island, €1.3m, through Savills © Christos Drazos

Daniel, an Airbnb host from Toronto, has let two holiday villas on the island for the past five years. This summer he is opening another six. “So, interesting timing,” he says. He knows that Airbnb hosts like him face a tough year. They will have to cope with a shorter season and less demand, and many have had to reduce their prices — in some cases by half. But looking ahead, he is more optimistic. “Santorini is not a trendy destination,” says Daniel. “It will always be at the top of people’s bucket lists, and so I would feel much more concerned if I was in a trendy destination.”

All of Daniel’s villas are in Pyrgos, a medieval village about 8km south of Fira, the capital. Pyrgos is less hectic than Oia, a village on the edge of the caldera, which has become heavily crowded with tourists in recent years.

Blue church domes in Oia, which has become heavily crowded with tourists in recent years
Blue church domes in Oia, which has become heavily crowded with tourists in recent years © Getty Images/EyeEm

In normal times, most evenings during Santorini’s long May to October season, crowds wind their way through Oia’s streets to snap the sun setting behind blue church domes and the white, cavelike houses that seem to tumble towards the water.

Oia is still among the most expensive places on the island, but overtourism had started to affect its desirability, says Danezi. She estimates that a small, 50 sq m house suitable for a short-let investment could cost up to €600,000 — just 2km away, she says, a similar property might cost about €200,000. “And you don’t get the crowds,” she says.

Whether those crowds, and a buoyant property market, will return while coronavirus remains a threat is unclear.

Buying guide

  • Santorini’s airport is undergoing an expansion. A new terminal is expected to be ready by 2021

  • Holiday-home buyers can expect gross rental yields of between 6 and 8 per cent a year, according to Savills

  • Buying costs are about 10 per cent of the purchase price. This includes notary fees, land registry fees, VAT and agency fees, which are usually 2-4 per cent

What you can buy for ...

  • €350,000 A two-bedroom villa in Megalochori

  • €1.75m A five-bedroom villa with a pool and more than 2,000 sq ft of interior living space in Akrotiri, in the south of the island

More at propertylistings.ft.com

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