Turned off by snootiness of the Parisians, overwhelmed by all those tourists
in Florence or baffled by the buzz about Barcelona? If you are looking for a
European bolt hole, you don’t have to confine yourself to the old familiar
places. Widen the search a little and there are plenty of other cities that
are just as easy to reach – and where prices will be lower than in more
established destinations. Choose your property well and it will pay its way
as a holiday home when you’re not there. Here’s our pick of up-and-coming
European cities – though, if you have set your heart on one of the classics,
look at last week’s guide at timesonline.co.uk/overseasproperty.
Lisbon
A 2½ hour flight from London, the Portuguese capital has undergone a huge
transformation in the past decade, with elegant shops springing up across
the city, charming new hotels in refurbished historical buildings and the
regeneration of old parts of the city such as Parque Mayer and Santos, where
Norman Foster’s practice is building a futuristic development including a
residential tower.
“Lisbon has immense old-world charm, a great climate, beaches 15 minutes away
and a huge array of leisure and cultural options,” says Alma Wright, manager
of the IRG agency (00 351 210 305022, www.irgportugal.com),
which has high-spec two-bedroom flats in a converted historical building in
the picturesque Chiado area for £440,000. “Property in the city is still
reasonably priced - £3,300-£5,000 per square metre in prime areas such as
Lapa and Estrela.”
Andrew Hawkins, head of the international department at Chesterton
International (020 3040 8210, www.chesterton-international.com)
is seeing new interest from top-end buyers. One newly renovated building is
Santa Catarina, a condominium complex where one-bedroom flats start at
£500,000.
“Visitor numbers and business activity are up, and a new airport is being
built, which will increase transport links and accessibility,” Hawkins says.
For those looking to let out their properties, one- bedroom flats fetch
about £450 a week and two-bedders about £550 in high season (April to
October), according to Holidaylettings.co.uk,
an online holiday rental company.
Dubrovnik
The Croatian port city has become achingly fashionable in the past decade -
with prices to match. The Knight Frank agency says that average prices in
Dubrovnik are £1,820 per square metre, but you can pay as much as £9,800
within the walled old town.
The market has slid by 20%-30% this year, bringing a necessary correction, but
housing values look certain to hold in the longer term, in part because the
surrounding hills limit the scope for expansion. There are few forced
sellers, at least among the locals. Croatians are “proud people who don’t
usually have mortgages and have often inherited their house, so they aren’t
desperate to sell”, says Jelena Cvjetkovic, head of the Croatia and
Montenegro desk at Savills.
The rental market is also good, especially for flats with all mod cons in
sensitively renovated old buildings. “We have a three-bedroom townhouse
renting out for £380 a day,” Cvjetkovic says. “A one-bedroom,
33-square-metre flat will command £85 a night.”
It is virtually impossible to find small one-bedders to renovate in the old
town any more, but Dream Croatia (www.dreamcroatia.com),
an associate of Savills estate agency, has the finished product - a
33-square-metre studio in a 16th-century palace - for £195,000. The same
agency is selling a stylish two-bedroom flat overlooking the cathedral for
£440,000.
The buying process in Croatia is slow and bureaucratic: registering a property
in your name can take up to 12 months and many foreign buyers find it easier
to set up a Croatian company and buy through that instead (although this can
mean administrative costs). These rules are set to change in February, with
the intention of making the property-buying process easier.
Palma
All that most tourists on the way to the beaches of Mallorca see of the
island’s capital is its airport, which is a shame. It boasts a great
location, a fantastic climate and is also a very Spanish city. Julian
Harris, a lawyer from Richmond, southwest London, bought his first property
there five years ago, a three- bedroom, £165,000 new-build flat in Portixol,
a former fishermen’s district with new beachfront cycle paths and trendy
restaurants.
“I use it a lot for main holidays and long weekends, and rent it out
occasionally, mainly to friends and family,” says Harris, 53. “Palma is an
incredibly attractive city, right on the sea, with a perfect climate and
everything you want commercially and culturally.” He likes the city so much,
he has just bought two more flats, for £420,000 each, in a converted
building near the cathedral. He plans to rent them out as long-term lets for
£1,000 each a month.
Mallorca has not been immune to the downturn on the Spanish mainland, with
many properties seeing price reductions of about 20% over the past year.
Terence Panton, director of the Palma office of Engel & Völkers (00
34-971 214140, www.engelvolkers.es),
says one- and two-bedroom flats are available for £150,000-£200,000.
Nick Russell-Hughes, a partner at Cluttons Mallorca, warns that recent
legislation, introduced to protect the hotel industry, means you need a
licence to rent property on the island on a short-term basis. In practice,
though, “there is little the authorities can do about you letting a friend
or family stay, with them putting expense money under the milk bottle when
they leave”. The agency has renovated properties in the old town, with
prices starting at £168,000 for a one-bedroom flat (971 734073, www.cluttonsmallorca.com).
Marrakesh
Cheap flights and a huge government-backed tourism drive have turned Marrakesh
from a bohemian bolt hole into a popular second-home destination. With its
new five-star out-of-town golf resorts, it is as likely to attract City
players as culture-loving buyers who want to immerse themselves in an
old-town riad.
Chris Monroe, 48, an oil trader from Bradfield, in Berkshire, has bought a
five-bed villa at the 700-acre Samanah Country Club for £758,000 through
Bridgehouse International, (0845 450 7358; www.bridgehouseinternational.com),
mainly because of the golf course, which will, he claims, be the best in
Morocco. “I love the city, but the medina is too busy for me,” Monroe says.
“Samanah is only 15 minutes from the centre, and the views of the Atlas
Mountains from the villa are stunning. We’ll use the property as a family
second home and I’ll rent it out for a few weeks each year to cover the
annual costs.”
Philip Arnott, director of Moroccan Properties (00 212 24 430465, www.moroccan-properties.com),
has seen prices in Marrakesh grow since 2001 - but here, too, the market is
softening. “Prices have dropped by 15% [from their peak], fewer projects are
being built and discounts of up to 15% can be negotiated,” he says. A
fourbed renovatedriadin the medina starts at £270,000 and can be let for
between £70 and £250 a night. Allow an extra 6% for buying costs.
Istanbul
Anyone who has attempted to drive from one side of Istanbul to the other will
appreciate that, in this mega-city spanning two continents, you need to pick
your area carefully. Traffic jams apart, areas of the historical centre such
as Beyoglu and Galata, which have the most obvious appeal to those looking
for an exotic, lively city bolt hole, bear little relation to the
multimillion-pound villas on the banks of the Bos-phorus, which in turn are
a world apart from the tower blocks springing up in the endless, uninspiring
suburbs, where foreign investors are buying cheap and renting to the locals.
The average price in the city centre is between £1,000 and £1,500 per square
metre, but houses on the riverfront go for a Mayfair-style £13,000 per
square metre. Turkeypropertyforsale.com has a two-bedroom flat in Taksim, a
busy central area, for £51,000 and a three-bedroom flat in a restored
historical building in Galata, with views of the Golden Horn peninsula, for
£143,000.
“Property prices are now static after two years of 20%-plus growth, fuelled by
demand and more widely available cheap mortgages,” says Dominic Whiting, the
owner and editor of Buying in Turkey (www.buyingin.co.uk).
“The fundamentals are still good, as there is a housing shortage and a
rapidly growing population.”
Rental returns may, however, be limited by the relative cheapness of the
city’s hotels. Holidaylettings.co.uk says properties advertised on its site
rent out for about £250 a week.
Although buying costs will add only a relatively modest 6%, be sure to employ
a good solicitor, as many properties have been built or altered without
permission. A further complication is new legislation that stops foreigners
buying in historic conservation areas, including parts of Beyoglu and
Galata, though this is being challenged in court.
Cracow
The charm of Cracow’s old town, crowned by Rynek Glowny, a huge medieval
square, takes the Polish city beyond the realm of pure investment (for that,
stick to Warsaw) and into pricey bolt-hole territory. Knight Frank says that
prime old-town properties command up to £5,500 a square metre - even more
than Prague.
After rises of more than 50% in 2006, and again last year, the market appears
to have burnt itself out – and prices are going down again. For £156,000,
Property Krakow Group (00 48 12 426 5126, www.property-krakow.com)
has a three-bedroom flat five minutes from the main square and the Jewish
quarter, Kazimierz, where local authorities are investing heavily in
renovating former warehouses.
Flats in Eleven, a new development in Kazimierz with parking, a concierge and
a sauna, start at £227,000, while a two-bedroom, 100-square-metre flat in a
converted fin de siècle building near the old town is priced at £260,000,
both through www.cracowonline.com.
Tom Leach, who runs the website Accessionapartments.com, which specialises in
tourist rentals, says a 25% drop in visitor numbers this year has dented the
short-term lettings market. “To keep business coming in, you need to offer a
more western level of customer service, responding quickly to inquiries and
being flexible over changeover times,” says Leach, who has one-bedroom flats
to let for £70 a night.
