real estate costing less to buy
Plus, 6 February 2009
The economic crisis has not left the luxury residential market untouched,
affecting mainly large dwellings in the so-called privileged areas
of the Athens conurbation.
"The absorption time for apartments in neighborhoods such as Kolonaki,
Psychico and Filothei has increased significantly, as we have cases
of units measuring over 250 square meters remaining empty longer than
eight months. As a result, owners short of liquidity have been forced
to scale down their prices in order to sell their properties. We have
seen cases where the difference between the initially quoted price
and the final sale price was as high as 20 percent," said one
real estate agent.
An average drop of more than 5 percent is also estimated in the rental
prices of luxury homes.
"The number of customers interested in such homes has decreased
significantly. For instance, executives of multinational companies,
who were an important source of demand in past years, have either fallen
in number or their employers, as part of cost cutbacks, have set ceilings
on expenses," observed another realty agent specializing in luxury
housing. "The crisis has hit everywhere; even leading luxtury
goods retailers are recording a significant drop in sales and profitability.
Of course the luxury housing market could not be the exception. It
is an international phenomenon that will not disappear in the near
future," he added.
Analysts are attributing the slide in prices and demand to the fact
that prospective buyers who have the money to buy are adopting a wait-and-see
attitude, expecting even lower prices. At the same time, buyers who
maintained demand in the previous year by offering record prices have
Meanwhile, statistical data based on a sample of 70,000 new residential
homes across Greece show that sale prices remained at 2007 levels last
Now discounts of 5-10 percent on initially quoted prices are generally
considered quite possible after some hard bargaining. The drop in sales
last month is estimated at 20 percent, year-on-year, in line with estimates
of the decline in mortgage lending.
Developers on the whole are now focusing on small apartments with an
area of 70 to 80 sq.m. Construction of dwellings measuring over 170
sq.m. has dropped sharply.