Location factor offers resistance
to house price pressure
by Nikos Roussanoglou, ekathimerini.com, 15 October
The quality of a neighborhood, which depends on factors such as proximity to squares, parks and urban woodlands,
can raise the price of a residence by up to 34 percent above the average rate, according to a study by the Bank
of Greece regarding the impact of green spaces on housing rates which was presented earlier this week at the RE+D
Business Forum in Athens.
The research, presented by BoG Property Market Analysis economist Vassiliki Vlachostergiou, was aimed at recording
how significant location is in the determination of a residence's price. Five main parameters were examined: the
existing town-planning status, the quality of infrastructure (access and transport), the quality of the structured
environment (common spaces, playgrounds, urban forests, parks and buildings), the quality of the natural environment
(proximity to a mountain or the sea) and population density.
The survey was conducted in the northern and southern suburbs of Athens between January 2012 and February 2014,
and showed that the quality of the structured environment, especially proximity to parks, urban forests, squares
etc, has the greatest effect on a property's final price, raising it by up to 34 percent compared to the average
rate. The second-most important factor in price determination is the quality of the natural environment, which
can result in an increase of up to 12 percent on the going rate.
On the other hand, in an exception to the market's general rule, access to public transport does not push prices
up by any significant degree in the capital. Buyers appreciate the surroundings of a property more than proximity
to public transport. Furthermore, a one percentage point increase in the building coefficient (the percentage of
built-up space in a given plot) can lead to a drop of up to 10 percent in property values due to the downgrading
of the neighborhood.
The survey found that the above factors account for two-thirds (67 percent) of the formation of house prices, with
the remaining 33 percent concerning the particular features of a house, quality of structure and energy efficiency.
The conference heard that those factors are not affected by the economic crisis and the real estate market. Therefore
houses with a favorable environment are more resistant to pressure in times of crises than properties in other