Fragmented real estate market sees wide variations in demand
The Greek real estate market is currently quite fragmented, as 2017 signaled the recovery of certain categories, the stabilization of others and the continued decline of the rest of the market.
Estate agents note that had it not been for the difficulties associated with nonperforming loans and foreclosures, the recovery of the property market would have been speedier and more comprehensive, as the cash flow would have increased significantly via the issuing of new loans, which remain out of reach for most for now.
Babis Christodoulopoulos, the former head of the Hellenic Valuation Institute (ELIE), summarized the conclusions of ELIE’s recent annual conferences in Thessaloniki, Iraklio and Athens, saying that price increases have been observed in cases of stores on traditionally popular streets, high-standard office spaces with energy efficiency certificates, desirable apartments and houses for short-term rental via online platforms such as Airbnb, properties sold to non-European Union citizens seeking a residence permit, modern logistics facilities and hotel properties located in popular tourism destinations that secure high occupancy rates.
On the other hand, there has been a decline in prices in areas with an oversupply of large apartments (such as the northern suburbs of Athens) and with shrinking populations. The same applies to newer buildings (built in the last decade), a number of which have not even seen their first residents, particularly where there are many unsold newly built residences.
Other parts of the market that have seen a drop in prices include store spaces on secondary streets, office spaces in areas with a large stock of low-quality horizontal properties or where enterprises are shutting down, as well as industrial areas where deindustrialization is under way.
The rental market is also experiencing fragmentation, with demand mirroring that recorded in property sales.
Market professionals note that bad loans and the way they are being managed are exacerbating the oversupply, while demand remains stagnant as a result of households’ low purchasing power, high unemployment and taxation, and low salaries. This is confirmed by the particularly low number of property transactions across the country last year, which brought the market to a virtual standstill.