ECONOMY

Real estate agents worry over future demand freeze

Real estate agents are particularly worried about the market’s near future and its housing section in particular. Prices appear to be rising and demand is now picking up, reaching levels that have not been experienced for some time, but realty agents know very well that this is an artificial speed-up of the market as value-added tax (VAT) will be imposed from January 1, 2006 and objective prices are set to rise. «In the last few months, we have been witnessing an impressive rise in demand, which now is translating into action which I believe will continue throughout the year,» noted Christos Samoladas, CEO of RE/MAX, a chain of cooperating real estate agencies. «However, no one knows what will happen in 2006 and how the market will respond to the tax measures the government is planning. The prevailing view is that the market will freeze for some time next year,» he said on the sidelines of his company’s third national conference. «Though house prices are indeed considered high by the vast majority of people, in this period, we are seeing new price rises, whether smaller or bigger, while in many cases there are incidents of profiteering owing to increased demand and uncertainty in the market,» Samoladas explained. Realty agents from both the RE/MAX network and outside it express their satisfaction with the number of phone calls and appointments they have each day, but make no secret of their worries about what lies ahead in 2006. As a result, they are trying to raise potential buyers’ interest, asking them to do extensive research to spot opportunities. Prices going up According to data by RE/MAX, in areas such as Maroussi, Pefki, Vrilissia, Nea Smyrni, Zografou, Nea Philadelphia, Galatsi, Glyfada and Voula as well as in certain spots in eastern Attica (Mesogeia) newly built house prices have recently risen by 5 to 10 percent. The areas that benefited from Olympic Games infrastructure and transportation are at the center of attention. Prices in the western suburbs of Athens, such as Ilion and Peristeri, are steady, except for the areas served by the new metro stations, where there are price hikes for houses and plots that reach up to 25-30 percent, depending on the neighborhood. During the second half of 2003, western areas of Athens recorded rises of 10 to 15 percent, reaching their ceiling in many cases. In eastern Attica, there has been a correction in prices due to the rally of the previous years which led prices up by more than 30-35 percent. In 2005, activity to date shows a 10-15 percent decline in prices with indicative sale rates for newly built houses at 2,800 euros per square meter and of used ones between 1,700 and 2,200 euros/sq.m. MAKIS THEODORATOS