ECONOMY

Greeks love place of their own

Greece bucks the European trend that favors renting a house instead of buying it. The market for new houses in this country may have become much more expensive since 2000, but this has not diluted Greeks’ wishes to own their house. The prevailing sense is that renting is a waste of money, while once the buyer has repaid the mortgage loan, he or she is left with a significant property asset. However this asset may well be 25 or 30 years old, depending on the mortgage, plus the costs of maintenance and insurance coverage. Low mortgage rates have convinced many households to pursue their dream and acquire their own house instead of paying a landlord every month. The truth lies somewhere in between, as the cost of paying the monthly installment of a mortgage loan lasting 20 years is at least 40 or 50 percent higher than the monthly rental for a similar apartment. So how much do Greeks have to pay for their dream to come true? Is it wise to rent or to buy in the present period? Estate agents and property surveyors have a variety of opinions, but they all agree that today the property market is quite overvalued. Prices of new apartments remain high, so candidate buyers have to pay more money. On the other hand, rent for apartments of 85 to 100 square meters, which most families opt for, are under pressure as the market has an oversupply of such flats. «In view of all this, I believe that, if not in a hurry due to specific reasons, candidate buyers had better wait and continue their market research to find opportunities that are beginning to emerge,» comments property consultant Nikos Yiannoulelis. «Current sale prices cannot be maintained for long, so I foresee a decline within 2007. As a result, the option of renting makes more financial sense than that of buying, at least in the short term,» he advises. Nevertheless, constructors inadvertently support the buying option: «In the recent past, the rumors that prices were about to fall have made potential buyers delay their purchase. Yet these estimates never proved correct, so some people bought houses paying 25 percent more. Furthermore, mortgage rates remain low, despite recent hikes, while competition among banks absorbs most of these rises, at least for new borrowers,» say construction firms’ representatives. «Conditions do not favor a drop in prices, so anyone who has decided to buy a house should act carefully but quickly,» the same sources suggest. Construction companies seem unfazed by the growing popularity of used apartments recently. They express their satisfaction with demand for houses since the summer, as reflected by the rate of demand for mortgage loans. They also estimate that as January 1 nears, when officially determined prices will probably rise, many buyers will make their move.