ECONOMY

Metro ups property prices

The Athens metro may have had little success in decongesting traffic in the city center but it has certainly proved the infrastructure project with the greatest impact on the prices of properties and mainly houses. Relying on its speed and reliability, the metro has managed to win the trust of passengers, so now the phrase «close to a metro station» is found more often in house sale ads. Proximity to a metro station is the strongest argument for someone selling his house to jack up its price 20-25 percent higher than a property not so close to a subway station. «The impact of the metro is crucial on the sale price of houses in the areas it serves, as it solves to a great extent the everyday problem of the quick and relatively convenient transfer from home to work,» says Lefteris Potamianos of the Search and Find estate agency. «Given today’s pace of living, that quality is for many households a key criterion in choosing a house and explains the reasons for which houses close to the metro sell like hot cakes,» he suggests. In the 1998-2002 period the rise in prices in areas with a metro station was impressive: According to available data, the average property price increase for the period was about 70 percent, but in the areas served by the metro increases ranged from 75 to 100 percent, with the relatively cheap areas (Sepolia, Attiki, Aghios Meletios) and the most populated ones (Ampelokipi) recording the greatest shifts. Such price rises are related to the general conditions which dominated the real estate market – such as the drop in interest rates and the rise of the stock market – that led to distortions, but, as property experts confirm, it was the metro which made certain areas rise high and make a strong re-entry to the property map. From 2003 till early 2005 the growth rate of property prices slowed down significantly, ranging between 10 and 15 percent, as the so-called expensive areas of the northern and southern suburbs have brought down the average figure. The metro-served areas, though, maintained their momentum, showing rises from 15 percent (Sepolia) to 26.6 percent (Ampelokipi). Data by Attiko Metro, the operating company, show that in 2003 the daily number of passengers was 506,836, rising by 9.79 percent in 2004 to 556,441. In the first five months of 2005 the daily average number reached 595,877 passengers, an increase of 5.15 percent year on year. The value of those figures is that they prove the rise in house price goes hand in hand with the rise of the population. The sole study conducted to date, by the National Technical University of Athens and the Public Works Ministry, estimated in 2002 that 70 percent of metro passengers reach the station on foot. Although the increase of parking spaces close to stations has reduced that percentage since then, the vast majority use the subway to go to work. The busiest hours are from 8.30 to 9.30 a.m. Monday to Friday – a fact which supports the logical conclusion that the metro is mainly used by citizens who choose to live close to its stations and that it is a useful transport means serving daily practical needs. On average, 83 percent of traffic is recorded Monday to Friday, 10 percent on Saturday and 7 percent on Sunday. Another fact proving the above conclusion is that in months with many holidays traffic on the metro is significantly diminished. Although many Athenians leave the city on public holidays, a large number stay in the capital and have plenty of spare time, but this is not enough to compensate for the drop in passenger numbers. Notably in April 2004, including Easter, passenger traffic was down by 9.72 percent compared with last April. This year, when Easter was in May, the number of passengers that month rose by just 0.6 percent from May 2004. However, says Potamianos, «the impact of the metro on the rentals market has been much more limited, and the same happens with the stations of Line 1 [Piraeus-Kifissia], even though connections with the metro at certain points could work in favor of those areas.» The impact of the metro also appears positive on commercial properties, mainly shops, affecting lease rates and, to a lesser extent, sale prices. «The growth of the metro has mainly bolstered local markets, as it has facilitated access for consumers from neighboring areas,» argues Dimitris Manousakis, head of the Savills consultancy firm. He adds that «the creation of a flow of new visitors has drawn the interest of nationwide chains, leading to higher leasing rates. A typical example is the commercial development close to Panormou metro station, completed in record time. Generally, the trend created has boosted leasing rates of shops close to the metro by 20 to 25 percent,» says Manousakis.