decline likely for property prices
News, 5 June 2010
Greece's deepening economic woes and the prospect of a protracted recession
have paralyzed the real estate market. Specialists describe the situation
in 2010 so far as the worst in living memory and forecast rapid developments
in the six months ahead, with dropping prices, an increase in the unsold
stock of houses, developers in a dire financial situation and houses
going on the block.
"We are in the heart of the crisis. The trend will continue and we
are not likely to see prices stabilizing before the second half of
2012," said realtor Costas Loukopoulos.
Since 2007, sales have been in a free fall that does not seem to have
come to an end. Last year, transactions fell to about 80,000, and are
projected to reach 20,000 in the first half and 50,000 in the year
as a whole.
No one seems prepared to make predictions as to how prices will develop,
as they vary considerably according to area or even neighborhood.
Market specialists on the whole estimate that prices have fallen by
about 30 percent since the 2007 peak. For instance, a developer asking
200,000 euros for a newly built house would have to settle for around
150,000 euros now. And from 3,000 euros per square meter, prices have
now fallen to 2,200 euros.
Although prices appear sticky at first sight, the final cost after
negotiations drops considerably - which favors prospective investors
with cash in hand.
The working- and lower-middle-class areas have been especially hit
by the economic downturn and in most of these, prices have fallen below
Properties on the other end of the spectrum, between 400,000 and 1
million euros, have also taken a hard hit. Many such properties, five
to 10 years old as well as many new ones, which have been put up for
sale either due to economic difficulties or due to high taxation, remain
The optimistic scenario foresees a drop in prices of possibly more
than 10 percent this year. The pessimistic scenario, related to the
prospects of a deepening recession and the likelihood of Greece abandoning
the euro- zone, sees a crash in prices, as few will be able to buy
at current rates and many mortgages will default. The latter is already
occurring at an increasing pace.