ECONOMY

Property in for tough fall

The property market is headed for a difficult autumn, as all indications point to residential housing and commercial property prices not making a rebound in the coming months. In the residential housing sector, a significant turnaround in prices is not expected, while building activity is likely to continue to slide. Current data indicate that the number of construction permits issued this year will be in the range of 60,000-65,000 new houses versus permits for 120,000 houses in 2005. This is one of the worst performances in recent decades and is unlikely to result in the absorption of the great supply that has appeared on the market over the past 18 months. In the commercial property sector, the market does not look to be in much better shape. No surprises are expected regarding the shopping malls in Galatsi and Votaniko where construction plans appear to have been shelved, while difficulties in obtaining finance are not encouraging potential investors to move ahead with significant investments. The trends that had been noted in the first six months of the year in the retail commercial property sector are likely to continue. According to some analysts, occupancy rates will be at levels seen in June, at best, and may drop by one percentage point, in the worst-case scenario. In the office property market, the likely scenario forecast by experts involves a slight drop in rental rates and a considerable increase in the supply of property available for rent. It is estimated that returns in the office market will be around current levels but much will be determined by the resilience shown by owners to selling or renting their spaces.