Monday, May 2, 2011

Athens Greece Real Estate Prices for 2011

This article concerns itself primarily with the most probable changes in real estate prices in the Athenian basin. The results are drawn from a market survey encompassing about 2000 successful real estate transactions (Triad Real Estate Group, Athens) and follow a Medium Gaussian Price Risk Probability pattern.
Even though each real estate negotiation between buyer and seller (through a real estate broker or middleman) which resulted in successful or unsuccessful transaction was considered as starting from ground zero (On Negotiating, McCormack: Dove books, 1995) a pattern nevertheless emerged showing in many cases a significant price reduction from the originally listed retail price.
Private Ownership Prices
Prices of apartments and residences that are 15 years or older are expected to decline by 25 to 30 percent from current 2010 retail list prices.

Housing properties around 10 years old will most likely experience a price discount of 10% to 15% from the 2010 list price.
The price erosion of new flats will depend on the current supply and demand of new flats which is area-related.
For example in areas such a Egaleo newly constructed flats have fallen in 2010 about 20% (Newspaper, TA NEA, 17th of April 2010) while as reported by Triad Real Estate, new flats in Agia Paraskevi have shown a 5 to 8 percent discount off the retail price. Some have even increased in price in order expand the supplier negotiating range.
Construction Company Supply Prices
Price negotiations for construction company-owned flats will experience a variable overlap of realistic target positions depending on the area supply and demand curves as well as the constructor’s financial health.

Major real estate firms report that construction companies that are highly leveraged or exposed due to, or because of, the public sector may be offering bargains of more than 100%. This means that a residence in a high-class district such as Ekali that has a retail list price of 1,000,000 Euros may eventually be successfully sold for at most 500,000 Euros.
Past market conditions resulted in narrow realistic target position overlaps due to the price inflexibility of construction companies and strong consumer demand. This situation is definitely shifting in favor of the buyer whose negotiation ardor strongly depends on the length of the construction crisis presently overshadowing Greece.
Unsold stocks owned by construction companies from 2006 and later are subject to VAT (23%) which is payable after 3 years. Such unsold stocks are expected to have a discount range of up to 20% before the VAT payment due in 2011.
The Greek Economy
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.

No comments:

Post a Comment