Poll: Realty prices seen stable despite excess in supply

The Greek realty market is currently beset by an excess supply of both housing and commercial properties, a recent study has concluded. The trend is reflected in a drop of the Greek Realty Confidence Index, which monitors market sentiment among professionals, from 46.6 points at the start of the year to 43.85, according to the Sixth Realty Market Survey, conducted by the Statistics Department of the Athens University of Economics and Business (AUEB). The residential housing index was down to 42.7 points and that of commercial properties to 45 points. Any measure below 50 points indicates a gloomier market situation. Sixty percent of survey respondents consider there is excess supply on the housing market and that the overall picture will not change appreciably in the next six months. Characteristically, not a single respondent saw the situation as improving significantly. Nevertheless, this is an improvement, as the percentage of those who believed supply to be excessive stood at 68.25 percent at the start of 2007. The excess supply is not seen as having any particular impact on house prices. Those who think that house sales will fall over the next six months outnumber by a small margin (34.8 percent) those who see an increase (32.6 percent) and those forecasting a stabilization of the market (32.6 percent). The almost even division of views does not allow for any definite conclusions on short-term trends. But it is worth noting that the number of developers and realty agents complaining that sales are falling is rising rapidly. Nevertheless, most (63 percent) see stable prices, both for new houses and older ones. As regards commercial properties, the picture is not much different. The corresponding index is at a two-year low. A large number of professionals (50 percent) do not expect the picture to change significantly in the second half of 2007. Those that see the market picking up represent 23.9 percent, up 6 percent from the previous survey. Seventy-eight percent consider there is an excess supply of commercial properties – a 26 percent rise over the previous survey. The particular category excludes space in highly valued areas where the availability of shops is close to nil. The survey reported no change in the absorption rate of available commercial properties, with 52.5 percent of respondents noting no change in the volume of stagnant items in relation to six months earlier. There has also been no change in sale prices. «Responses to the questionnaire indicate that no fall is foreseen in the prices of housing or commercial properties, at least within 2007. The responses of experts are in line with world trends; that is, that there is no prospect of a speedy decline in realty prices, at least until the end of 2007,» says AUEB professor Emmanuil Panas. He adds that it is particularly encouraging that the great majority of experts consider the realty market currently conceals no «bubble» that could threaten the Greek economy.