Metro drives up house prices

Demand for new homes in Athens in 2008 is expected to focus on areas with good accessibility to the city center and moderate prices. However, demand is also expected to be strong for secondhand homes, particularly those which combine good quality and low cost. There is no doubt that the popularity of such opportunities, particularly of those no older than 15-20 years, has been pushing up their prices and closing the gap between secondhand and new homes. The areas served by new and planned extensions of the metro subway system are expected to remain in the limelight, as in 2007. «Developers continue to keep their prices high, as the majority have sound finances and little exposure to debt. On the other hand, rising interest rates seem to have affected demand, except in areas served by the metro. On the whole, the significant available stock of housing seems to be keeping prices stable in most urban areas,» Eurobank Properties said in its latest information bulletin. Property market players say the metro is becoming a key factor, as prices in 2007 appeared higher in areas near to a station. Proximity and accessibility to the city center also play an important role and this is expected to continue in 2008. Older apartments in the district of Ambelokipi, as well as large parts of western neighborhoods such as Peristeri, Aegaleo and Haidari, Neos Cosmos and Dafni are expected to continue attracting interest in 2008. According to Eurobank Properties, prices are generally projected to stabilize. However, the new tax measures – which benefit buyers of first homes of up to 200 square meters – could create some upward movement. Although this may not materialize if the government announces upward revisions of officially determined prices according to area (for tax purposes), for this would have an adverse impact on the psychology of prospective buyers. Saturation Nevertheless, in areas that have already shown signs of saturation, such as the northern suburbs, the picture is not expected to change significantly this year. In fact, realtors report that in some, such as Kato Kifissia or Paradeisos in Amarousiou, prices have fallen by as much as 5 percent. This is attributed to a combination of low demand and relatively high availability of new houses. It is clear that in areas where starting prices are around 3,000 euros per square meter (of which there are now many), no significant changes are expected. Where costs are noticeably lower, as in the western areas, we should see an increase in buying interest. Those with higher incomes orient themselves toward eastern Attica which, due to what is seen as a higher quality of life in areas such as Pallini and Glyka Nera, is expected to keep demand buoyant. The majority of first-home buyers are not in a position to spend more than 250,000 euros and, as a result, new constructions of over 120 sq.m. should not register price hikes. For this reason, many developers have lately been turning to smaller dwellings of 70-90 sq.m.