Thou­sands of empty prop­er­ties face the prospect of de­mo­li­tion

Kathimerini English - - Focus - BY NIKOS ROUSSANOGLOU

Hun­dreds of thou­sands of prop­er­ties around Greece are at risk of see­ing their value plum­met even if the econ­omy re­turns to steady growth in the com­ing years. Con­se­quently, th­ese prop­er­ties may even be put up for de­mo­li­tion, prop­erty val­u­a­tors and mar­ket pro­fes­sion­als tell Kathimerini. They note that as long as the slug­gish­ness of the last few years per­sists, it be­comes even more likely th­ese prop­er­ties – typ­i­cally low-stan­dard con­struc­tions or older ones in less at­trac­tive ar­eas – will exit the mar­ket al­to­gether.

Sec­tor ex­perts such as Babis Char­alam­bopou­los, ex-head of the Hel­lenic Val­u­a­tion In­sti­tute (ELIE), es­ti­mate that the num­ber of empty prop­er­ties of all forms is close to 500,000 around the coun­try. This is ex­pected to con­tinue ham­per­ing the fu­ture re­cov­ery of the real es­tate mar­ket even if the econ­omy re­turns to the path of growth.

This fig­ure partly con­cerns the estimated stock of un­sold prop­er­ties that is thought to come to around 200,000, in­clud­ing newly built as well as older houses, plots of land and com­mer­cial build­ings. It also con­cerns prop­er­ties that are not rented and those aban­doned as a re­sult of thou­sands of cor­po­rate shut­downs.

Char­alam­bopou­los notes that many houses are empty be­cause for­eign­ers (mostly mi­grants) who used to work in Greece have now left the coun­try and many young Greeks (some 450,000 ac­cord­ing to the lat­est es­ti­mates) have em­i­grated in search of work, while a num­ber of oth­ers have re­turned to the fam­ily home due to fi­nan­cial prob­lems.

Fur­ther­more, “the coun­try’s de­mo­graphic data have been neg­a­tive for a series of years, re­sult­ing in a grow­ing sur­plus of square me­ters of houses,” he adds.

All this, com­bined with the sig­nif­i­cant de­cline in house­hold in- comes, high un­em­ploy­ment, tax hikes, and pen­sion and salary cuts, mean that con­struc­tion ac­tiv­ity is un­likely to re­cover any time soon, hav­ing al­ready shrunk by 95 per­cent since 2007.

Char­alam­bopou­los says that with the cost of a new con­struc­tion amount­ing to­day to an av­er­age of 950 euros per square me­ter, plus the cost of the plot and any min­i­mum profit, it be­comes clear that the con­struc­tion of new prop­er­ties does not make any fi­nan­cial sense. Prices have de­clined 42 per­cent on av­er­age in the last nine years, while in some cases the drop amounts to 60 per­cent.

Prop­er­ties that are old and re­main empty for years are likely to exit the real es­tate mar­ket al­to­gether, ex­perts note.

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