House prices still rising

Housing prices in the capital are continuing on the rising course that started in 2005, according to a recent survey by the Statistics Department of the Athens University of Economics and Business (AUEB). Data show that across Attica the mean price of houses on sale rose in the April 2005-April 2006 period by 11.5 percent, with rates rising in the first four months of this year too. The head of the Statistics Department, Epaminondas Pannas, suggested that the continuing rise is due to the constant expansion of mortgage credit in a period when interest rates remain low while macroeconomic factors still support the constant rise in house prices. «In this sense, developments in the housing market are considered normal and no one talks about a bubble,» Pannas argued. Developments may be seen as normal but this certainly does not mean that buying a house is easy for the average Greek household. The average price of a newly built apartment has risen to 2,200 euros per square meter, while a year earlier it stood no higher than 2,000 euros/sq.m. These prices found by the AUEB survey come from the processing of classified ads and do not concern newly built apartments but four- to 10-year-old flats. In April, Athens city center was the area with the lowest rate in Attica, the survey found, with an average price at 1,777 euros/sq.m., which is 6.59 percent higher than the findings of a previous AUEB survey last February. The lowest average price was found in Amerikis Square, at 1,192 euros/sq.m., while the highest was at Goudi: 2,461 euros/sq.m. Notably in the Hilton area, 25 percent of houses on offer cost at least 2,590 euros/sq.m. In the year to last April the rise in prices was estimated at 5.9 percent. The market of used houses in the northern and southern suburbs also shows a considerable increase in prices, as the better quality of life they offer and the greater number of green spaces are attracting more and more households. In the northern suburbs, the average price was found to be 2,615 euros/sq.m. and has risen by 1.71 percent compared with February and by 11 percent within 12 months. The most expensive area is Papagou, with an average of rate of 3,182 euros/sq.m. The southern suburbs have recorded an average price of 2,667 euros/sq.m., up by 15 percent from April 2005. Leading among the southern suburbs is Voula, with an average price at 3,427 euros/sq.m., while a quarter of Voula houses on offer come at a rate higher than 3,830 euros/sq.m. Eastern Attica, however, is by far the leader in price increases, following a period of price consolidation. The average rate borders on 2,000 euros/sq.m., having risen by no less than 20 percent in the last 12 months and by 6.4 percent since February. The most expensive area in Eastern Attica is Saronida, with an average rate of 2,692 euros/sq.m., while a much cheaper solution is Koropi, with an average price of 1,882 euros/sq.m. Mortgage credit may be expanding, but price increases have brought major changes in the size and duration of loans. According to data by EFG Eurobank, mortgage loans with a repayment period beyond 26 years now make up 13 percent of the entire market, having been at just 0.3 percent in 2000. In 22 percent of all cases, loans cover more than 85 percent of the market value, while in 2003, it was no higher than 8 percent.

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