ECONOMY

Salonica market shifting

Unlike Athens, Thessaloniki is expanding only through enlargements to its city plan, mainly to the east and west of Greece’s second city, although distances from the center are far smaller than the Athens equivalent. Price differences are also stark as even the «expensive» houses in developing areas, mainly eastern Thessaloniki, can hardly be compared to average prices in Athens’s city center, which are lower than in the capital’s suburbs. There has always been a clear distinction between the eastern and western halves of Thessaloniki, with middle- and upper-income groups choosing the eastern one, pushing prices higher, says R Invest estate agency owner Sotiris Hatzivakalelis. «The eastern side has better schools and roads and generally enjoys a higher status. On the contrary, the western side, developing fast these days, has no such reputation, so newly built houses are cheaper,» Hatzivakalelis explains. New road projects on the western side have brought more interest from construction firms, particularly at Evosmos, Kordelio and Stavroupolis. Although far from the city center, they are cheap and popular with families, with an average rate of 1,500-1,600 euros per square meter. Polichni provides a similar story, but rates are lower. «Prices start from 1,300 euros/sq.m. and do not exceed 1,400 euros/sq.m. Due to the smaller total permissible built area, constructors mainly build maisonettes,» says Hatzivakalelis. Another developing area is Frangon, where many manufacturing plants are sold in order to be revamped. This and the availability of plenty of land have rendered Frangon a developing area. There is a significant supply of bedsits there, while many choose the buy-to-let option as purchase rates do not exceed 1,600 euros/sq.m. Western opportunities The new entry point in the west of the city has pushed prices in the area close to Monastiriou and Yiannitson roads higher. «Investments at those points are significant, as they are upgrading the hitherto second-rate areas,» says Hatzivakalelis. «Besides houses, there are investments in stores, as in the notable case of City Gate, the new shopping center that combines recreational and commercial uses. The area is the only developing one close to the city center,» stresses R Invest’s owner. Prices for newly built houses there rank among the city’s lowest, starting from 1,350 euros/sq.m. Demand is high from relocating Black Sea Greeks and from families, so estate agents expect prices to rise. On the eastern side, development is rapid and the city’s more affluent residents in most of the neighborhoods there pay between 1,700 and 2,000 euros/sq.m. for new houses. Kalamaria, for instance, has drawn constructors’ special interest after the extension of the urban plan, plus it is on the coastline. Pylaia’s entry into the urban plan has brought about the construction of maisonettes as well. Add to this the large shopping and recreation center, Mediterranean Cosmos, set to open before the end of 2005. Hatzivakalelis predicts interest will rise for other eastern areas such as Nea Redestos and Thermi. However, not all developing areas are good for the real estate market: The Trilofo-Perea-Nei Epivates triangle, to the east of the airport, had such a supply in properties that the market got saturated.