House prices grow 105 pct in seven years

The value of houses across Greece grew by 105 percent in the 1999-2006 period, according to 32,000 assessments by four of the top Greek banks, while in the center of Athens prices have soared by as much as 149.4 percent. This is the latest finding of the real estate index Propindex, formed by Property Ltd in association with the National Bank of Greece, Alpha Bank, EFG Eurobank and Emporiki Bank. The index’s data were presented yesterday by the CEO of Alpha Astika Akinita, Antonis Leousis, in the context of a conference organized by Real Estate & Development magazine titled «Investing in Destinations.» The lowest rise in prices in the same period was recorded in the region of Eastern Macedonia and Thrace, estimated at 62 percent. Leousis added that the banks’ estimates converge in an average price per square meter, which in 1999 stood at 867 euros for flats and at 949 euros for detached houses. Seven years later, these rates rose to 1,717 euros/sq.m. and 1,709 euros/sq.m. respectively. Despite the oversupply of houses on the market, no decline in prices is seen for this year and next. The conference also heard that the government’s moves to lift some of the tax burdens and to abolish the transfer tax at least on a main residence could encourage profiteering in the market in order to reap capital gains. The significant decline in interest rates combined with the high rate of economic growth, the increase in population and the number of households and the absorption of immigrants have been the main reasons behind the impressive increase in prices on the local housing market. «During 2006, the local market showed signs of tiredness, resulting in a significant decline in demand. The imposition of value-added tax (VAT) along with the rise in interest rates have led to the accumulation of many houses for sale, creating an oversupply on the market. However this has not yet put any pressure on sale prices,» said Leousis. He did add that the actual entry of VAT into the market – as deeds under the new tax status are still very limited – will bring about a fresh rise in prices, albeit a small one.

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