ECONOMY

Older apartments receive more attention, offering good value

High property prices are turning many families to older apartments, those 25 years old and more, so they can buy more surface area than they had originally planned. Such apartments are the biggest section of the Greek market’s stock, covering the vast majority of houses for rent. A search among these flats may well produce some good opportunities, offering value for money. What determines the value of a house which is into its third decade is its area and surface. Note that flats up to 70 square meters are a separate category: The big demand by a heterogeneous population combined with the small supply due to the reluctance of constructors to build small flats give them a timeless value in the property market. Their main characteristic is their high marketability and better maintenance of their value than bigger houses. In the so-called expensive areas the supply of such apartments is limited, with most of them to be found in Athens city center neighborhoods. There is considerable supply in the market’s best-selling category, flats ranging from 70 to 110 sq.m. Since this segment is mainly addressed to families, it is under more pressure as mortgage loans have increased significantly. Low interest rates render such loans attractive, so many households opt to buy a newly built flat of this size instead of one that is 25-30 years old. Older apartments appear more attractive, however, when one compromises in favor of purchasing an older house in a better area or with a bigger surface. Estate agents say that the great majority of households start looking exclusively for a newly built house. As they go on, though, they switch to used apartments due to the high prices of new ones, in the end buying more square meters than they had planned in the beginning, effectively securing a more spacious home. Size matters In Kifissia the price per square meter for flats older than 20 years ranges from 1,500 to 2,200 euros, while those aged over 30 years are sold for 1,300-1,900 euros per sq.m. Prices for newly built houses in Kifissia are 56 percent higher, ranging from 2,200 to 3,000 euros/sq.m. In areas like Aghioi Anargyroi, Kypseli or Ilion, new house prices come to 2,000-2,400 euros/sq.m. As for surface area, in central areas such as Kypseli, Patissia or even Galatsi, one needs up to 140,000 euros for a house bigger than 120 sq.m. and older than 20 years, while in suburbs like Halandri or Aghia Paraskevi the price could reach 170,000-200,000 euros. A newly built house of 130 sq.m. in Aghia Paraskevi requires about 325,000 euros. On the other hand, older constructions, the lack of parking spaces and of heating autonomy, the absence of a fireplace and the uncertainty about the state of plumbing or electrical wiring make a number of households switch back to buying a new but smaller dwelling. Prices for older houses are on their way up, following the general trend. They are also linked to the improving finances of immigrants, mainly of Albanian origin, who have boosted this category of properties. As to how the value of those houses will move in the next 12 months, the jury is still out. The majority of estate agents Kathimerini spoke to suggest prices will either level off of drop slightly. The more optimistic agents, however, refer to a market freeze in the first half of 2006 with the great supply of new flats coming without value-added tax, as their permit was issued this year. Even the rise of the officially determined values by 30 percent, as the government says, will keep them below market levels, again helping newly built houses. What would really promote older houses is a rise in interest rates, making mortgages more expensive, as well as a drop of transfer tax from 11 to 9 percent. Still, market experts expect the impact of any tax changes to emerge in the market only from 2007.