estate prices continue falling
Plus, 25 June 2010
Property prices continue to decline and are projected to fall yet further,
as real estate transactions slow to a trickle. The fall to date is
estimated by market players at around 20 percent compared to two years
ago, and is fueled by the increasing number of owners who have put
up notices of their intention to sell but have met with weak demand.
According to the latest report by Hellastat, the number of transactions
is expected to decline by a further 50 percent this year, after the
36 percent drop last year from 116,000 in 2008 to 73,300.
In addition to weak demand, the report has noted the relative reluctance
of banks to grant loans and the large stock of unsold new apartments
- estimated at around 200,000 - as reasons for the market slump.
The primary feature of the market at present seems to be prospective
investors turning toward smaller and used apartments - a trend that
has intensified over the past two months, since the announcement of
the latest tax measures. Even though the prices of such dwellings seem
to be the most resistant to the decline, studio and two-room apartments
older than 20 years in the center of the city can be acquired for a
mere 150,000 euros. Their attractiveness is boosted by the fact that
there is strong demand for renting them.
In all the other categories, the sellers are mostly people who need
cash urgently - and are therefore prepared to offer large discounts
- and buyers are those who have cash and do not need loans - including
many who have been alarmed about the security of their savings due
to Greece’s economic woes and are anxious not to appear to have large
cash balances in the bank. Many such buyers have adopted aggressive
tactics, demanding large discounts, and frequently are able to achieve
price cuts of more than 20 percent.
Many attractive opportunities are cropping up in areas that have witnessed
a building boom in recent years, such as Gerakas, Pallini, Spata and
Koropi in Attica. In Gerakas, for instance, prices of newly built apartments
begin at 2,300 euros per square meter. On the other side of the city,
in Aegaleo, where prices stood at about 2,400 euros/sq.m. two years
ago, they are now around 2,000 euros. In areas such as Maroussi, Halandri
and Aghia Paraskevi, prices have fallen less steeply. The drop mostly
affects apartments larger than 100 sq.m. The prices of country houses,
however, appear to have fallen the furthest.
The next test period for the market is projected to be the months before
the upward revision of the officially determined (for tax purposes)
property values - which is seen as being early in 2011.