The Greek Real Estate Market: Prices for 2011
Oct 12, 2010 Antonis Hontzeas
Greece:Expected Real Estate Prices - antonis hontzeas
For the first time in decades, the Greek Real Estate market may be undergoing price erosion.
From a macroeconomic perspective, the Greek Ministry of Finance reported that the overall Greek economy shrunk about 2% in 2009 and was expected to shrink a further 2% in 2010.
Deutsche Bank reported early in February that the Greek economy would retreat about 4% in 2010 (The Greek Ministry of Finance reports a retreat of 2.5% in the first quarter of 2010) and market forecasts speculate that the economy may shrink 5% by the end of 2010.
The Greek government’s austerity measures (which include those imposed by the International Monetary Fund and the European commission) require that debt is reduced by at least 3% of current GDP by 2012.
Real Estate Market Characteristics
The Greek real estate market has up to now demonstrated impressive price insensitivity when compared to foreign real estate markets. The reason for this price inflexibility even in times of economic crisis is due to the financial independence so far enjoyed by most real estate owners (Active Real Estate, Thessaloniki). A good segment of real estate owners consists of pensioners, construction companies and permanently employed civil servants.
The latest measures taken by the Greek government have chewed into pensions and civil servant salaries, and have generally introduced an element of uncertainty to traditional real estate owners, uncertainty that has lead to price flexibility. Buyers’ expectations have also become to a large extent unreasonable, mainly because of a two year continual media buyer conditioning of an eminent collapse in real estate prices.
Price Erosion Pressures Mounting
The year 2010 has been pivotal for Greece; the inclusion of the country under the auspices of the International Monetary Fund and European Support Mechanism; the new austerity measures, the crackdown on tax evasion, the continuing cutbacks in personal income which for the first time affect pensioners and the massive Greek civil service; the uncertain future of the civil service; the unavailability of loans and drop in the supply of money; the rapid decline of real estate transactions and ensuing collapse of the real estate and retail markets, the general negative buyer psychology and negative spending propensity has put enormous pressures on real estate prices, pressures that are now becoming evident.
Read on
The Greek Commercial Real Estate Market in 2010
The Greek Real Estate Market in 2010
Greek Real Estate Prices Persist
In addition, the government’s plans (in 2011) to further increase the real estate objective or taxable value in stepwise fashion until the objective value is close or equal to the market price - and associated indirect increase in transaction overheads and indirect taxes - will put a further strain on the real estate market supply side, which may result in further price erosion pressures.
Expected Real Estate Prices for 2011
A recent study shows that the Greek real estate market will recover only when a significant price correction is experienced on the supply side and more reasonable demands per euro are eventually forged on the demand side.
For the first time in the last couple of years, sufficient information exists as to how much this expected price erosion will be, and which supply segment will experience it.
που οπως λες θα ανεβουν κιολας! θα πανε 350 δηλαδη? η παραπανω? μια ερευνα πριν λιγα χρονια εδειχνε οτι το 85% των αγοραστων κατοικιας στην αττικη παιρνουν δανειο, και δεν εχουν τα λεφτα! με ολη αυτη τη κατασταση (μην τα αναφερουμε συνεχεια μειωση 20-25% στους δημοσιους ανεργεια στους ιδιωτικους και κανονια στους ελευθερους επαγγελματιες, και με ενα τραπεζικο συστημα που παιρνει πισω τις πιστωτικες αν καθυστερισεις μια μερα και δανεια και καρτες δινει σε ελαχιστους τι στιγμη που πριν απο λιγα χρονια μας παρακαλουσαν, εσυ επιμενεις οτι οι τιμες δεν θα πεσουν αλλα θα ανεβουνε κι ολας!!! τα συμπερασματα στο κοινο...
