Real estate experts forecast a 30% drop in the prices of Greek real estate market for the next two years. Real estate deals decreased by 60% and brokers are expecting the market situation to improve in the second half of 2012.
Real estate prices have decreased – insignificant in some areas and more in others. The prices of real estates on the islands of Egina and Kitira have dropped by around 19%, rental prices mainly of premises for business purposes have fallen between 20% and 40% and the number of empty stores in the commercial center in Athens increase to 18.7%, which is a mere record.
Times for the construction companies have become hard as demand decreased and the prices of materials grown after the increase of VAT and fuel prices. As a result, 800 construction companies applied to be deleted from the register of their union. The analysis of the market rates, made by Propindex, shows a significant drop in prices of flats and return to their 2006 levels. The Propindex is formed on the base of the evaluations of flats made by the analyzers of four major banks – Etniki, Alpha, Eurobank and Emoriki while Probank submitted data for the first quarter of 2010. According to brokers, real estate prices could fall further reaching two-digit number by the end of the year.
The sale prices of flats in Greece register a 7.7% drop for the first quarter of 2010 compared to the same period of the previous year. Buyers’ demand is targeted to old real estates and shrinkage of the market of newly constructed flats is 5.5%. “The most serious drop is registered in the premises of business use. Depending on the area they are located the fall ranges between 20% and 40%. At the same time, one out of five stores remains closed. Indicative is the facts, that only one out of ten empty stores is offered for rent again. That is why the rentals are falling down with such pace,” stated Nikos Yanoulelis – a real estate broker – for the Ethnos newspaper.
There is no serious change in the rentals of flats of between 50 and 100 sq. m. The prices of 100 sq. m. flats have dropped by around 20%. The drop in prices of studios and one-bedroom flats is insignificant – between 5% and 10% depending on the district. Eight out of ten buyers prefer to buy old flat because of the lower price. According to Yanoulelis, there will be a slight increase in purchase agreements of real estates and decrease in prices at the same time, and the market will balance in the second half of 2012.
Lower prices are offered in the suburbs of Athens – Voulyagmeni and Ekali, says Mr. Dimitris Kapsimalis - chairman of the Construction Association. According to him, those who intend to invest in real estate should do it now. He noted that building permits have not been issued for a long time, prices of vacancies have grown because of the uncertainty of their owners; there is no cash money on the market and the interest rates of mortgage loans are too high. “The situation will get back to its normal when the government announces its development measures”, added Mr. Kapsimalis.