Renting becomes more attractive option
Athens Plus, 7 August 2009

Official data showed a nearly 4 percent average rise in rental agreements in Greece in the 12-month period to June 2009, compared to the preceding 12 months. This is one of the highest increases in recent years.

According to real estate agents, in the most popular category of apartments - those of up to 80 square meters - the average increase has been steeper, at around 10 percent.

This development is a reflection of a strong shift in interest from buying to renting homes, especially since the beginning of the year. However, despite the shift, the number of homes for rent that remain empty has stayed high, while the average time for an empty flat or house to be rented averages around three months.

Another strong feature of the market in the large urban centers is the preference by many owners to keep apartments empty rather than rent them, deterred by the high tax burden and refurbishment costs.

At the same time, the number of evictions has been rising, in line with the number of tenants who are either unable to pay or are forced to delay payments.

As a result of the slump in housing sales, developers and realty agents are opting for sale contracts whereby buyers repay the sums involved directly to them over periods of up to 20 years, thus avoiding the problem of banks' reluctance to grant mortgage loans.

"Such schemes are proving a catalyst for the sale of many houses, since they provide a solution to the major problem of financing, which has risen due to bank decisions to cut mortgage loans drastically," said one real estate agent in Thessaloniki. "In actual fact, the housing market has returned to the situation that prevailed 20 years ago, when most houses were paid for with promissory notes."

It has to be noted that such schemes mainly apply to houses of up to 70 square meters and with a cost that does not not exceed 140,000 euros.

The usual arrangement involves a down payment of 50 percent of the value and regular installments for the remainder.