Property market has started feeling the pinch of changes in taxation from Jan. 1

Public opinion seems to be taking a poor view of the government’s recently announced changes in property taxation as of next year, mostly considering that they will lead to higher prices, according to the results of a study conducted by Kapa Research. The report, which was presented at yesterday’s annual real estate conference and exhibition Prodexpo 2005, found that 55 percent of respondents are unhappy with the changes, which notably include the imposition of value-added tax on new properties. Only 14.1 percent view them in a positive light, considering they will stem tax evasion and rationalize the market; 27.8 percent said they were not adequately informed on the subject. Of those intending to buy property in the next two to three years, 34.1 percent said the changes had affected their plans, mostly forcing them to postpone purchases (47 percent), look for smaller or cheaper properties (26.2 percent) or expedite purchases (19.7 percent). Eight in 10 people believe property prices will rise and only 5.9 percent think they will fall. A comparison of the results of this year’s survey with last year’s shows that people are lowering their sights, looking for smaller homes; 50 percent more now expect to buy studios or two-room apartments and correspondingly fewer people plan to purchase four-room properties. The percentage of those intending to buy a house in the next two to three years has fallen to 23 percent from 31 percent last year. One in three prospective buyers belongs to the 35-44 age group and one in four to the 45-54 group. Three-room apartments are in the greatest demand; further, about one in four households planning to buy real estate are interested in land plots, but the percentage of those intending to build their own house has fallen to 15.2 percent from 18.9 percent last year. In the Athens area, the northern and southern suburbs and the city center are the areas most popular for property buys. Two-thirds of prospective buyers will cover part or the entire cost of the purchase with loans. The percentage of prospective sellers has declined slightly from 18.3 percent to 17.4 percent. Most of the supply concerns land plots and three- and two-room residences. Again, supply is highest in the city center and the northern and southern suburbs. It also appears to have increased – particularly for land plots – in seaside areas. The supply of properties for renting is a multiple of demand. According to the findings, 21.2 percent of properties are offered for renting and 5.5 percent of respondents are looking for one, both numbers being lower than last year. In the Athens area, 77 percent of households own their residence, 71 percent live in apartments and 29 percent in detached houses; 20 percent live in a property that has been built since 1990. One-fifth of existing houses were built in the 1980s, 27 percent in the 1970s and 30 percent before 1970. The average number of rooms per house is 3.4; 10 percent of people live alone, while half of the houses are occupied by two or three people; 32.6 percent is lived in by four and 7.4 percent by more than four. The average number of people per residence is 3.02. Finally, the study records a high degree of satisfaction with present residences (86.4 percent).