– Ered
There is still an impressive increase in potential apartment sales prices in five areas of the Greater Athens area [Ambelokipi (Center) Maroussi (North) Palaio Faliro (South) Peristeri (West) Cholargos (East)] monitored by the GEOAXIS Apartment Values Observatory 2023.
The market research was carried out through on-site data collection through autopsies and through advertisements published in newspapers and on the internet, for five indicative residential markets, during the 3rd quarter of 2023.
Such strong price growth, according to analysts, is likely to be put on the brakes in the coming months due to shrinking demand caused by rising lending rates, galloping energy prices and rising prices of construction/renovation materials, events that will lead potential buyers to adopt a wait-and-see attitude.
By no means is the market currently experiencing bubble conditions, as the level of supply (especially of newly built apartments) is still very limited compared to demand.
Double-digit price increases for both newly built and older apartments
Specifically, according to the Observatory, between the third quarter of 2023 and the third quarter of 2022, there was a median annual increase of 14.92% for newly built apartments and 13.81% for older apartments. The significant rise in values is explained by the fact that due to a large reduction in supply (due to the excellent tourist season and Airbnb) this year’s sample mostly includes much newer and more expensive apartments. The results of the company’s analysis for the last 10 years are significant. The data shows that there is an average increase of 66% in newly built apartments and 61% in older apartments, compared to 2014 values.
Newly built Apartments (up to 5 years old):
In the new age apartments, with an average surface of 95 sqm, median age of just 2 years and 1st floor, the market research led to the conclusion that the highest values are recorded in Cholargos (4,048 euros / sqm from 3,565 euros / sqm, with an annual increase of 13.55%) and then in order in the area of Paleo Faliro (3,400 euros / sqm from 2,950 euros / sqm with an annual increase of 15.25%), Maroussi (3. 304euro / sqm from 2,856euro / sqm with an annual increase of 15.69%), in Ampelokipi (2,795euro / sqm from 2,500euro / sqm with an annual increase of 11.80%) and finally in Peristeri (2,401euro / sqm from 2,029euro / sqm with an annual increase of 18.33%). Based on the above, Peristeri recorded the largest, while Ampelokipi the smallest annual increase, compared to all other areas.
Older Apartments (35+ years old):
As far as old apartments are concerned, with an average surface area of 100 sqm, median age of 43 years and 2nd floor, the survey showed that the highest values are recorded in Cholargos (2. 235 euro/sqm from 1,985 euro/sqm with an annual increase of 12.59%) and then in order: in Maroussi (1,852 euro/sqm from 1,620 euro/sqm with an annual increase of 14.20%), in Palea Faliro (1,751 euro/sqm from 1. 536 euro / sqm with an annual increase of 14%), in the area of Peristeri (1.487 euro / sqm from 1.268 euro / sqm with an annual increase of 17.27%) and finally in Ampelokipi (1.457 euro / sqm from 1.313 euro / sqm with an annual increase of 10.97%). Based on the above, Peristeri recorded the largest annual increase while Ampelokipi the smallest annual increase, compared to all other areas.
Research conclusions
According to analysts, in the medium term, the gradual conversion of apartments into workplaces is expected to bring about tectonic changes in the way they are designed, constructed and renovated (materials, networks, insulation, large common areas, etc.). Despite the low yields they offer, in the absence of supply and increased demand, apartments will increasingly be added as an important element in the portfolios of AIFs and investors in the coming years.
The generation of tenants
The certain inability of a very large percentage of today’s young people to own their own home is shaping (Generation Rent), which is expected to dominate in the coming decades even in high owner-occupied countries such as Greece and Spain. The longitudinal widening of the gap between base wage growth and property value growth is revealing and fully explains in financial terms the shift to renting. Characteristically, between 2012 and 2022, according to EUROSTAT, the basic wage has fallen by 11.7%, when apartment values nationwide have risen by 17.0% based on Bank of Greece indices.