ECONOMY

Property prices take a hit in 2003, but some areas thrive

We have become used to property prices, especially those of housing, constantly increasing. However, trends reversed in 2003. According to a recent analysis by the real estate firm Property, average housing prices in Attica declined 4 percent in the first nine months of 2003. However, given that the housing market is a fragmented one with each area having its own unique features, prices continued to rise in certain places, such as the municipality of Tavros, southeast of Athens, and the area of Votanikos, in western Athens. To many experts, the fall in prices, which took place mainly in the third quarter, was a move to stabilize a market that had risen precipitously over the past three years. The uncertainty prevailing in international markets and the continuing deterioration of the economic climate in Greece, partly due to the continued fall of the Athens Stock Exchange during the first quarter of 2003, made would-be buyers very careful and unwilling to pay the high prices demanded by home builders, construction firms and other property owners. This was the trend despite the continuing high demand for housing, real estate brokers say. Another feature of the past year was a resurgence in interest in buying property in the center of Athens. Proximity to jobs and leisure options, combined with the building of the metro, which has minimized traveling time and hassle, contributed decisively toward this trend. Moreover, the relatively cheap prices compared to those of the wealthy northern suburbs, as well as the availability of small apartments, attracted many young couples to the city center. On the other hand, it was a difficult year for properties in Athens’s northern suburbs. A traditionally expensive area, it saw prices fall by an average of 20 percent. This market now has an excess supply of housing, which is being exacerbated by the recent trend toward building housing estates. However, real estate brokers remain optimistic. «2003 was indeed a difficult year but there are good prospects for 2004. The presence of large construction companies with high profit margins guarantees price stability, even though selling these houses may take longer,» says Yiannis Revythis, president of the Federation of Attica Real Estate Brokers. Other areas with good prospects are those near large transport projects, such as the metro, Attiki Odos and other road projects. Even areas close to the Piraeus-Kifissia electric railway have benefited from the refurbishment of its stations.