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W
e are all just spectators to the deci-
sions taken in regard to real estate. In
case, however, our politicians fail to
reduce public expenditure one thing is certain:
next year, property taxes are going to be even
higher. And you cannot help asking yourself, how
will property owners cope with these taxes, when
most properties do not generate any income at
all.
Greece presently has tens of thousands of Small
and Medium-sized Enterprises, whose operation
has been based on their own capital, accumulat-
ed through sales made around the middle of the
past decade. That period saw the sales of prop-
erties that would normally be sold during a six-
year period; as a result, developers actually found
themselves with ample liquidity until 2007.
Developers knew that, owing to measures such
as the imposition of VAT etc., there would be a
slowdown in sales after 2006, and thus engaged
in more selective development projects, of defi-
nitely better quality. However, in the near future
developers will not have the opportunity to sell
even the properties that are presently unsold,
given that they cannot gain any additional m
2
from
legitimized semi-open areas or other spaces that
have changed use, such as basements, attics,
etc. The developers cannot reduce their asking
prices any more, since they are well aware that
they are not able to replace their current housing
stock. Developers have already reduced prices
below 2004-2005 levels.
For the time being, they remain in a state of com-
plete inactivity. According to Bank of Greece data,
prices had fallen by almost 40% year-on-year in
January 2012, while last January they had
already fallen by 35% as compared to the previ-
ous year. Until the end of 2011 and as a result of
the crisis, 1,200 developers had been deleted
from our Association's register, while 80% of the
remaining companies were inactive. It is, also,
worth mentioning that sales barely reached
35,000 contracts this year, most of which con-
cerned newly-built and select properties, as com-
pared to 180,000 properties sold in 2004 and
250,000 properties sold in 2005.
Trade with Greece
20
The recession in the property market is now out of con-
trol, and current property prices have fallen below the
sum of construction and land costs.
Our country's economic
problem can be solved
through the (fast-track)
development of no
more than 5-10 areas
By Dimitrios Kapsimalis,
President of the Hellenic Union of Developers