Postcard from Corfu: Old money meets new Russians.

The last time I visited a Greek island they were still using their own currency, you couldn't flush loo paper, the food was indescribably awful and the barren, baked landscape of Crete seemed deeply uninviting.

This year, now that we are no longer tied to our own 'holiday home', we decided to return and give Corfu's fashionable north east coast a chance to redeem the country.

You still can't flush loo paper (surely this should be one of the criteria for EU entry) but the food was better than I remembered, the island is lush and beautiful and the Euro is at least a currency I sort of understand.

A 12 hour delay at Gatwick wasn't exactly the best way to start my first ever visit to Corfu.

We shared this nightmare with about 200 other passengers persuaded by CV Travel to fly on their charter service.

Choosing a tin-pot Lithuanian carrier for their flights was a very big mistake by supposedly up-market CV and its relatively new owner, Kuoni.

If the passenger manifest had been made up of average British holidaymakers, it would have been bad enough. But this was the poshest check-in queue I've ever seen.

The Boden kitted travellers on this non-flight to Greece probably cost more to educate than a fleet of new Boeings would cost to lease. And their alcohol fuelled anger as the hours clicked slowly by in the hell hole that is Gatwick South will have long term ramifications for CV.

Dinner parties all over West London will be regaled for months to come with horror stories of how we were treated, how badly informed we were and how we were eventually shipped out on a hardly airworthy decades old 737 with no markings and an eastern european crew of dubious quality. (Avoid at all costs any flight on the preposterously misnamed Grand Cru Airlines.)

It was an exhausting way to begin our short holiday. And I was seriously beginning to question our decision to discover what friends and family find so alluring about this particular Greek island.

Several people we know own houses and another has even moved here to become a high-end developer. All of them are based on the North East Coast between Corfu Town and Kassiopi. It's  where the Rothschilds famously own a compound (looks like a castle to me). This area is posh with a capital 'P'.

How it became a magnet for the 'well to do' is both obvious and baffling at the same time.

The craggy bays of the coastline are truly beautiful, the waters are crystal clear and the tavernas on each beach peddle cheap and largely edible food to accompany liberal quantities of even cheaper local wine.

But, and it's a big but for me, the beaches are pebble. There is no sand. None. The main town, Kassiopi, is awful - bad restaurants, cheap bars, naff shops. The food shops, where they exist at all, are universally terrible - only one sort of bread, for example. And there's a fundamental lack of quality about the place.

Greece is really a third-world country masquerading as an upwardly-mobile member of the EU. You sense this the moment you leave the faded grandeur of Corfu Town and follow the ramshackle strip development along the coast road. For the first 10km it's all run down tavernas, half built villas, tatty tourist shops, piled up rubbish left untouched, indecipherable and infrequent road signs.

I'm not sure whether this decay is due to the economic crisis or simply a trait of modern-day Greeks. I suspect the later.

Fortunately, after about 10km, the developments disappear and you start a switch-back ride along a spectacular coastline where the British have long dominated the property market.

If you bought a property here 20 years ago, you're probably very happy. If you bought more recently, things aren't looking so good..

Prices have gone only one way recently: down. Last year alone, prices dropped 12%.

By way of example, behind our rented beachfront house at Kaminaki I found a pink painted and completely refurbished old olive press for sale. Original asking price €1.3m. Now just €950k. And probably yours for any decent offer.

That's a big drop for a 2500 sq ft four bedroom house practically on the beach in a cute little bay where rental demand means you could probably get a gross annual return of 3%....and still have a holiday home available for 40 weeks of the year.

Just along the coast, however, a luxury development of three ultra-specified houses sold at ambitious asking prices to East european buyers (Moscow is only 3 hours away by private jet).

The future, it seems, isn't about the British buying up old stone houses for next to nothing. It's about minor oligarchs seeking luxury seaview homes that would cost five times as much in St Tropez or St Jean.

To avoid this influx of nouveaux riches I would focus on buying somewhere overlooking the bays of Agni or San Stefanos. Agni is home to perhaps the best taverna on the whole coast, Toula's. And Stefanos is so pretty even a ghastly place called the Wave Bar can't spoil it.

As much as we loved our week, and admired the homes of our friends, I won't be trawling the local agents' websites in search of a new holiday home in either of these bays

I like sand too much.