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FEB
2010 GREEK MARKET REPORT - HAR - George Sitaras
The
Greek economy is in a critical point. It needs a long-term plan with
concrete targets and a reset plan of the erroneous
developmental standard, which has exhausted all margins.
It
is henceforth clear, that in order to we avoid the rapid divergence
from the EU, ambitious, but achievable objectives and reforms in the
critical sectors should be placed.
The
effort has begun and we already are in a difficult course. The
purpose is not the economic support, but the discouragement of
profiteering attacks of economic interests, with objectives and
consequences that exceed the size of country.
The
situation in the real estate market this year, as the next, is
expected to be perhaps more difficult than 2009. This means that the
pressures to the constructors, but also the real estate agents that
are also affected by the low sales, will continue, leading enough
professionals out of the market.
The
stock of unsold residences decreased during 2009 and is calculated
around 145-160.000. This reduction is attributed to the fact that not
a lot of new residences were constructed, since the majority of
constructors, because of the unfavourable
climate, selected to abstain from new investments.
According
to the studies of the Bank of Greece, the Economic University of
Athens, and the Institution of economic and industrial researches,
resulted that for 2009 we have:
Reduction
of the volume of transactions with medium annual rate
41.2%, against 23.5% the previous year.
Minimal
medium shrinkage of residence prices, less than 10%.
The
prices of structural materials were perceptible reduced.
Bank
cash flow existed, specifically the 2nd half-year period, but there
was no market cash flow.
Forecasts
for 2010:
Continuation
and intenseness of crisis.
Stabilization
of prices, mainly of residences.
Few
transactions of commercial properties.
From
the 2nd
half of the year, it is expected a marginal improvement with small
increase of the number of transactions.
Perhaps
further shrinkage of structural material prices.
Obligatory
increase of financing by banks concerning housing loans.
Few
new growths, as we will mainly have exhaustion of the existing stock.
For
the present, the crisis did not leave big marks, precisely because
considerable projects had not been materialized in our country.
Regarding
financing, the situation does not appear to be differentiated
perceptibly, so that it gives the boost for the resurgence of the
demand. During the next year, it will also move in low levels, while
the issuing criteria from the banks' side do not appear that they
will be become more flexible.
Furthermore,
their financing has been dramatically reduced: from 35% that was the
increase rhythm of housing loans five years ago, hardly reached 4%
last year.
This
new environment can have catalytic consequences in the level of
prices. The combination of lack of cash flow and overtax of real
estate properties can change the current market situation, resulting
to further reduction of prices.
It
is forecasted that the real estate market will need at least two
years until it recovers. Due to the meters
of the purification
of
the Greek economy, the available income of citizens is expected to
shrink, resulting to reduction of sales of new residences.
As
for the foreigner investors, they are presented anything but lenient
with the Greek market, with their reports being few regarding the
prospects for 2010.
The
demand from abroad is associated with factors that are difficult to
be evaluated with the current data.
The
course of the countries of the European Union, but also of the USA,
influences the tourist product, while an important factor is also the
exchange rate of Euro, mainly regarding to dollar.
Sure
is that the situation has been reversed, we are in a market of
buyers, with important increase of investment opportunities.
Finally,
it is marked that the total transactions in 2009, were 92.000. This
number is one of the lowest of the decade and rather of all times,
proving with the most explicit way that the domestic real estate
market goes through deep crisis.
However,
the progressive deterioration of the economic situation in the
country, in combination with the constructors' persistence to
maintain the prices of real estates in the pre-crisis levels and the
interruption of lending of banks, led to complete immobility,
resulting to the above fall of transactions.
Therefore,
the dependence of the real estate market on the public finances is
obvious, because the recovery of economy will also mean the
consequent growth of the real estate market.
Sources:
Economic
University of Athens
Realestatenews.gr
National
Statistical Service
Bank
of Greece
Foundation
for Economical & Industrial Research
Newspapers:
Kathimerini
Eleftherotipia
Isotimia
Naftemporiki
Real
estate & development
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