ECONOMY

Homes in Greek capital lose half their market value in five years

The economic crisis and extremely sluggish demand in the real estate market have resulted in house prices nosediving by more than 50 percent since 2008, according to experts.

While there are plenty of great bargains to be found all around the Greek capital, funding real estate purchases is where the real problem lies as banks have all but given up on issuing new mortgages, even in cases when a house is clearly a bargain.

In most cases, meanwhile, asking prices are below the rate used by tax authorities, known as the “objective value,” meaning that buyers would be taxed on the estimated rather than the actual value of the purchase.

Lefteris Potamianos, vice president of the Athens-Attica Estate Agents’ Association, says that “interest is minimal, while there may even be some more margin for negotiation,” even in houses offered at a discount of more than 50 percent compared with 2008.

A typical example concerns a 70-square-meter first-floor apartment currently on sale for just 38,000 euros when its objective value is set at 50,000 euros. The flat is on Asclepiou Street, at the foot of Lycabettus Hill in central Athens, and was built in 1970. A similar flat on the market in 2008 was going for 80,000 euros, meaning a 52.5 percent drop in the current asking price.

In upscale Kolonaki in central Athens, another first-floor apartment built in 1975 and with an area of 114 sq.m. is currently on sale for 250,000 euros. Before the crisis such a property would have cost some 400,000 euros, i.e. 37.5 percent more than it does today.

In Zografou, east of the city center, a two-story maisonette on the second and third floors, covering 138 sq.m. in total, represents something of a bargain. Built in 1996, it includes parking and storage spaces, and costs 150,000 euros, while a few years ago it would have cost 250,000 euros – a 40 percent decline. A similar maisonette, of 170 sq.m. and with access to a 100-sq.m. terrace, is on sale in Neos Cosmos for 90,000 euros, against the 190,000 that it would have cost in 2008, i.e. a drop of 52.6 percent.

Finally, in Neo Psychico, north of the center, a third-floor flat complete with parking and storage spaces, is on sale for 220,000. A few years ago such a property would have cost around 370,000, or 40.5 percent more.