-By George Papou
Ten years ago, the asking price for a student two-bedroom apartment was around 300 euros. Nowadays, not even 500 euros is enough and even for properties of dubious quality.
Geoaxis’ survey of 6 student towns is revealing. Not because we were not aware of the jungle conditions that have been created, but because the situation is reflected in tables and cold numbers. What is the main conclusion?
An increase of over 80% in Athens for a student apartment
Athens is the city with the highest and Komotini the city with the lowest rental prices for typical, old, student apartments. And to make it clearer, compared to 10 years ago, the asking prices have increased by 61.9% on average, with Athens recording an impressive 80.42% increase!!!!
As for last year’s already very high levels, the level of the increase in asking rents is determined at 18.7% on average.
And of course we are not talking about high quality apartments, judging by their age. The oldest student apartments are recorded in Thessaloniki (Centre) with a median age of 53 years. This is followed by Athens with a median age of 48 years, Volos and Patras with 33 and 32 years respectively and Komotini with 23 years. The lowest median age is found in Heraklion, Crete with… just 22 years.
The bottom line is that a change of scenery should not be expected. On the contrary. A key finding of the survey is that significantly fewer student apartments are available on the market compared to 2014, as a proportion of properties around 15-20% have permanently entered short-term rental status, while the supply of student apartments is expected to decline further due to an increase in tourism.
“Rents are also on the increase in shops, offices
It is no coincidence that as the quality of the existing (state-owned) university student halls of residence are considered from tolerable to disappointing, while their numerical inadequacy is a given, many private companies from the entire spectrum of the real estate market (AIFs, construction companies, investors, funds, private individuals, etc.) rushed to take advantage of the rapidly growing demand. The trend of investment in this sector is expected to intensify significantly.
But it’s not just the student accommodation that has gone uphill. Something similar is true of professional housing. According to a relevant study by the National Bank of Greece, during the first half of 2023, 1.1 billion euros (+ 39.5%) flowed into the Greek real estate market from abroad, while in the second quarter the growth rate accelerated (+ 46.2%), with investments amounting to 605.8 million euros.
The reasons for the maintenance in 2023 of investment interest from abroad are: a/ the lack of stock of ESG (environmental) compliant commercial properties and the demand for them by corporate tenants, b/ the popularity of short-term rental accommodation, c/ the demand for residence permits through the “golden visa” programme, and d/ the fact that properties in Greece are significantly cheaper than their foreign counterparts.
In particular, Greece has high rents per sq.m. per month and higher yields in all property categories compared to European markets (except the UK). It is indicative that a shop in Ermou “pays” 285 euro/sqm per month, while a similar shop in Lisbon “pays” less than half that amount.
Short-term parameters that are likely to negatively affect the commercial housing sector are the increase in energy and construction costs, geopolitical uncertainty, which is estimated to delay or even lead to a standstill in investment activity, the cycle of “tighter” monetary policy with the rise in interest rates applied by central banks.