prices are resisting the slide
Plus, 24 December 2008
Demand for newly built houses continues to be subdued in the Attica
area but this appears to have had little effect toward inducing developers
to bring down their prices. Sales of new homes have fallen by 50 percent
this year, but prices have rarely dropped more than 5 percent.
This kind of decline would have appeared especially steep only a few
months ago in the Greek market but is virtually negligible compared
to the slump in property prices elsewhere in Europe.
The large gains of recent years and limited bank lending are the main
factors behind the vast majority of developers’ stamina in maintaining
their asking prices. What’s surprising, however, is that even older
apartment prices appear to be sticking.
According to a survey by the Statistics Department at the Athens University
of Economics and Business, based on sale ads in November 2008 and compared
to those of a year earlier, the decline in asking prices in Attica
appears to be especially limited. In the center of the capital, the
drop averages just 0.79 percent, in the northern suburbs 1.54 percent,
in the southern suburbs 0.25 percent and in Piraeus 3.45 percent.
The steepest declines were in western Attica, at 4.81 percent, as well
as in eastern Mesogeia, at 4 percent. The average asking price within
the limits of the city of Athens is today estimated at 1,785 euros
per square meter, in the northern suburbs 2,750 euros/sq.m. and 2,739
euros/sq.m. in the southern suburbs. In western Attica, it is just
over 2,000 euros/sq.m., in Piraeus it is exactly the same price and
in Mesogeia it has fallen to 2,087 euros/sq.m.
Variations between different areas within each zone and comparisons
with November 2007 do not allow the researchers to draw any safe conclusions,
says Professor Epameinondas Panas, who oversaw the survey. But he notes
that in the upmarket areas of each zone, prices have either remained
stable or even risen.
For their part, realtors say that the survey clearly shows a trend
in the market toward older apartments, which has now eclipsed that
of new buildings, but claim that the actual drop in prices is greater
than the survey shows.
This appears reasonable, given that the study is based on asking rather
than final prices, which are subject to negotiation, especially given
the conditions prevailing in today’s market.
Land prices in Attica seem to have receded much more, around 20-30
percent, compared to last year. Even so, the number of transactions
is minimal, as prices had skyrocketed in recent years.
Prospects are directly related to the housing market and building activity
and for this reason no substantial recovery in prices is expected within
the next two years.