Hundreds of thousands of properties around Greece are at risk of seeing their value plummet even if the economy returns to steady growth in the coming years. Consequently, these properties may even be put up for demolition, property valuators and market professionals tell Kathimerini. They note that as long as the sluggishness of the last few years persists, it becomes even more likely these properties – typically low-standard constructions or older ones in less attractive areas – will exit the market altogether.
Sector experts such as Babis Charalambopoulos, ex-head of the Hellenic Valuation Institute (ELIE), estimate that the number of empty properties of all forms is close to 500,000 around the country. This is expected to continue hampering the future recovery of the real estate market even if the economy returns to the path of growth.
This figure partly concerns the estimated stock of unsold properties that is thought to come to around 200,000, including newly built as well as older houses, plots of land and commercial buildings. It also concerns properties that are not rented and those abandoned as a result of thousands of corporate shutdowns.
Charalambopoulos notes that many houses are empty because foreigners (mostly migrants) who used to work in Greece have now left the country and many young Greeks (some 450,000 according to the latest estimates) have emigrated in search of work, while a number of others have returned to the family home due to financial problems.
Furthermore, “the country’s demographic data have been negative for a series of years, resulting in a growing surplus of square meters of houses,” he adds.
All this, combined with the significant decline in household incomes, high unemployment, tax hikes, and pension and salary cuts, mean that construction activity is unlikely to recover any time soon, having already shrunk by 95 percent since 2007.
Charalambopoulos says that with the cost of a new construction amounting today to an average of 950 euros per square meter, plus the cost of the plot and any minimum profit, it becomes clear that the construction of new properties does not make any financial sense. Prices have declined 42 percent on average in the last nine years, while in some cases the drop amounts to 60 percent.