Property supply is set to soar
Property market professionals in Greece expect pressure to increase on prices in the category of apartments with the highest demand – i.e. those ranging between 80,000 and 150,000 euros – in the coming years.
The reason for that is the projected growth in supply over the next few years, as some 70,000 to 100,000 residential properties are expected to come on to the market in the context of the impaired loans clearing process. A large section of those properties will fall into the above price category. Although that stock will not enter the housing market overnight, it will likely change its balance in the long term, shifting the negotiating power to the buyers’ side.
Such a development will force many owners who want to sell their assets in the years to come into competition with servicers, property management companies and banks, which have more flexibility in this market. Meanwhile, now, and until the volume of properties for sale grows either through auctions or other means, such as online property platforms, sellers have a significant opportunity to secure a respectable price.
However, the problem lies in the culture of sellers: Antonis Markopoulos, chief executive of property utilization startup Prosperty, says: “Of the 150,000 monthly searches on the property platform we have developed we have realized there us a considerable gap between the asking prices and the rates that buyers are willing to discuss. Generally the distance comes to 20 to 25 percent.”
He adds that sales are eventually agreed at significantly lower prices than advertised.
“In the end, what we see is that as the asking price drops, demand soars. Many owners start from a high level with the aim of having some margin for bargaining before securing a lower price. Yet what they actually do is discourage demand,” Markopoulos stresses.
Given that the offerings to enter the market through banks and property managers in the following years will be priced at normal rates (not overpriced), the market is likely to change how it operates: “When there are suddenly more options in a given district, at a lower cost too, private sellers will change their attitude,” he predicts.
