Property prices burnt by recent wildfires
Athens Plus, 11 September 2009

The impact of last month’s wildfires on the property market of northern Attica will be immediate and is set to last at least a couple of years, real estate experts warn.

The prices of property in much of northeastern Attica are expected to decline by as much as 20 percent in the next few months, market professionals suggest, although it is not yet clear how long this decline will last.

Experience from similar events in the past has shown that, initially, all activity freezes. Nikos Hatzitsolis, chief executive at CB Richard Ellis-Axies, says, "Anytime a disaster happens, transactions stop for quite a long period."

He adds that "the current situation is rather unique as these areas have repeatedly suffered from wildfires and it will be very hard for them to benefit from reforestation. This means a downgrade of the environment that renders them less attractive to prospective buyers." As a result, there will be a negative impact on the prices of land and buildings.

Yiannis Paraskevopoulos, chief executive at Danos & Associates, agrees, noting that "those areas have now lost their comparative advantage, which was their natural beauty."

He explains: "There is also a safety issue, as no one can guarantee that there won’t be any more fires in the future, quite the contrary actually. All this dissuades potential buyers and pushes demand and prices. Of course, we are talking about legal construction."

After the destructive 1999 Athens earthquake, which had its epicenter beneath Mount Parnitha, just north of Athens, the prices of property on the side of the mountain dropped by up to 15 percent on average. This was also during a period when the Athens property market was beginning to rally. Still, there can be no comparison between the earthquake and the wildfires.

The impact on prices varies depending on the area. Some areas further away from Athens could be hurt more than those closer to the city center, such as Dionysos or Aghios Stefanos, says Hatzitsolis. After all, home construction is greater there than in areas such as Voutzas, Drafi or Kallitechnoupoli in the northeast.

Despite this uncertain picture of the market, which will affect it in the medium term, the negative effect on prices will not last too long, according to Lefteris Potamianos, who heads the Search&Find real estate agency.