ECONOMY

Smaller homes gain favor

The economic crisis has begun to transform the residential property market, with the marks it has left now clearly visible. According to real estate agents and bank executives involved in mortgages, the market is «revolving around small homes in areas that have particular characteristics.» «The average home being sought occupies about 80 square meters and the average price per square meter is below 3,000 euros. On the other hand, there are homes at the higher end of the market for which demand has shown signs of waning, but prices remain high due to limited supply. These are features of a market going through a crisis – that is, buying interest is located in either very expensive areas or in areas where prices are well below average.» Another feature seen in the current market is that buying interest for very large properties is almost non existent. «No one wants to rent or buy a home above 200 square metres since they will come up against the tax authorities and be stuck with high maintenance bills,» said one real estate agent, who pointed out that there is a lack of potential buyers that run their own businesses. «Business owners are currently facing financing problems. Meanwhile, those who do not have any cash problems are particularly pessimistic about the future. This means that they prefer to hold on to cash rather than buy property until the economic environment is clearer, mainly regarding the duration of the crisis.» Some business owners are being forced to sell their real estate assets to create working capital for their operations. «You should also not underestimate the fact that returns from deposits are higher than those offered by real estate investments,» the source added.