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Real estate market is stabilizing as GREXIT recedes

15 February 2013 / 17:02:12  GRReporter
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The probability of Greece exiting the euro zone was one of the most significant factors that contributed to the collapse of the real estate market in 2012. The prices of old properties in Greece fell by 13% on average compared to 2011. The average drop in the prices of new buildings across the country was 9%.

"Price levels depend on various factors. During the specific period, the negotiations (with the lenders’ supervisory Troika) and the specific situation of the Greek economy influenced the prices. The characteristics of different regions, the demand and quality of the properties play a role as well", states the CEO of REMAX-Greece Stelios Samoladas cited by To Vima.

According to the figures published by the real estate company, 78% of the real estate sold in 2012 was residential - flats, small houses and maisonettes. Plots and office real estate were only 11% of the business activities of REMAX. In the region of Attica, residential properties were 81% of total sales, the share of office property was 9% and that of plots and agricultural land was only 2% of the sales.

The company did not sell any free land in Thessaloniki in 2012. 92% of sales were of houses and only 8% of the property was sold for business purposes.

In the rest of the country (except Attica and Thessaloniki), the interest in the sale of free plots and agricultural lands was significantly higher - 19% whereas the share of the sale trade of houses in the country was 78% of the real estate market.

Three out of four buyers were looking for a small or medium-sized property (less than 110 square metres) and 21% of customers were looking for a flat of between 50-70 square metres. 66% of the buyers in Athens, 64% in Thessaloniki and 87% in the rest of the country bought a house smaller than 110 square metres.

85% of REMAX’s customers bought an old house. Almost half of this group purchased property over 20 years old. One in three people in Attica preferred a flat more than 30 years old whereas this figure approached 60% in Thessaloniki.

"The course of the Greek real estate market will be determined primarily by the state of the local economy. Stabilization of the economic situation and expectations for growth in the final months of 2013 may create conditions of greater security and a positive attitude that will allow the real estate market to take a breath", said Samoladas. He believes that the forthcoming recapitalization of banks can create conditions that in theory would allow banks to "unfreeze" mortgage loans. The government, in turn, can help the process of recovery of the real estate market by reducing the tax assessments and the tax on property transfer - a plan that now seems unfeasible.

Tags: EconomyMarketsReal estateGreeceDeclineTaxesCrisis
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