ECONOMY

Supply of small apartments short of rising demand

Small apartments in Athens, particularly those in central neighborhoods, such as Kolonaki and Plaka, are favorites among foreign citizens seeking accommodation during the Olympic Games in August, seeming an economical and satisfactory solution. For the same reason, Greek permanent residents, including households with modest incomes, immigrants, young couples, students and pensioners, form a large and varied population group seeking something scarce: small apartments and studios. In this category of housing, mostly found near the center and the capital’s so-called «old» neighborhoods, the fundamental relation between supply and demand works impeccably; supply is short. «The smaller the apartment, the more expensive per square meter,» is the consensus among real estate agents. Frequently, rents for houses of 60 and 80 square meters (sq.m.) differ only slightly. «The basic criterion of construction firms is commercial value. Small apartments may be in greater demand but they also have a higher cost, as they mean that more kitchens and bathrooms have to be fitted in any given block,» says Thanos Karayiannis of Danos & Partners. «In densely populated areas, with good public transport and shopping facilities, rents for a standard two-room apartment (45-60 sq.m.) range from between 7 and 9 euros/sq.m. And if it is near a metro station, it can exceed 10 euros/sq.m. The completion of the tramline will have a similar effect.» «The large number of immigrants who came after 1990 ultimately caused rents to fall in the densely populated areas near the center. In order to prevent the emergence of ghettoes, the quality of the housing in these areas must be upgraded. We need small apartments, as a large section of the population is not willing to spend their life savings on a bigger apartment. Rightly or wrongly, an apartment is a matter of economic ability, not of desire,» says Karayiannis. Big construction companies that have moved in the direction of small, quality apartments have been vindicated. The 13 studios up to 40 sq.m. constructed by Kopelouzos Real Estate in Nea Filothei Village were snapped up, while the bigger apartments are being more slowly occupied. A similar thing has happened in Cybarco Real Estate Development’s Phoebus complex in the neighborhood of Zografou. Piraeus Real Estate’s housing and shopping complex in the northern city of Komotini includes 130 studios which have also been pounced upon by the parents of students who attend college there.