appears to be slow in real estate market
Plus, 14 August 2009
The omens are not good for a recovery in the real estate market this
coming autumn. Construction activity continues to decline and prices
remain subdued. All available data indicate that residential building
licenses this year will number about 60,000-65,000, against 120,000
in 2005. Such a figure, despite being one of the lowest in recent decades,
is considered too high to help with the absorption of the excess supply
of properties that appeared about 18 months ago.
According to data gathered by Aspis Real Estate in the first half of
the year, residential house prices in the greater Athens area fell
on average between 4.75 percent in the western suburbs and 10 percent
in the areas around the center. Sales were down 9.4 percent compared
to the first half of 2008.
Aspis CEO Miltiadis Efthymiadis notes, however, that after a slump
in January and February, the market has started to pick up.
"Prospective buyers remain cagey and are continuing to look for opportunities
but are slowly coming to the realization that it will be very difficult
for average sale prices to decline any further," he says.
According to a survey concerning 2008 transactions, the vast majority
of prospective buyers are looking for apartments that are more than
five years old. In fact, 30 percent of transactions concern houses
built more than 30 years ago. Brand-new apartments are sought by just
23 percent of buyers.
According to realtors, 46 percent of the apartments sold in Athens
and Thessaloniki are no larger than 80 square meters and those over
170 sq.m. represent just 12 percent. Apart from the cost, the main
deterrent seems to be the much steeper tax rate for larger apartments.
Prospects are also dim for a recovery in the domain of commercial real
estate this fall. In the Athens area, plans for malls in Galatsi and
Votanikos are not making any headway, while the difficulty in borrowing
does not encourage any prospective investors. The slump in retail sales
and negative expectations regarding when recovery will actually begin
are also driving chain stores to scale down previous expansion plans.
As regards office space, the most likely scenario sees a small decline
in rental prices and a significant rise in availability. An increase
in the number of empty office spaces was reported last month on the
high-profile avenues of Kifissias, Mesogeion and Syngrou.