Property asking prices seem to be losing steam, as rental rates drop

The first signs that the Greek property boom may have peaked have started to emerge, mainly in areas where rates have soared over the last 18 months.

For now property ad website Spitogatos is reporting a slowdown in price growth, but property market professionals say it is likely the pace of price expansion will gradually stabilize, depending on conditions.

Data from the Spitogatos platform showed that prices across Greece grew by 6.5 percent on an annual basis in the last quarter of 2019, down from 7.4 percent in the previous quarter. In the center of Athens prices augmented at a yearly rate of 10.7 percent, with the average asking rate at 1,550 euros per square meter. However, the annual comparison in the third quarter of the year had shown an increase of 25.3 percent.

This significant slowdown in the pace of growth confirms estimates by sector experts that such a high and sudden rate of increase is not sustainable.

A similar picture emerges from data concerning other areas in Attica: The southern suburbs of Athens, which attract a large share of interest from abroad, saw the average asking rate climb 4.8 percent year-on-year to 2,575 euros/sq.m., against a 10.4 jump in the third quarter. In the northern suburbs the growth rate decreased from 6.1 percent in Q3 to 3.9 percent in Q4, while there was a marginal increase in the capital’s western suburbs from 9.7 to 9.8 percent.

In Thessaloniki prices rose by 28.3 percent in Q4, following a 32 percent leap in Q3, maintaining the city’s position as the market with the highest increase – after recording the biggest drop among the country’s main cities.

Also encouraging for those seeking accommodation is the fact that rental rates are also showing signs of fatigue after a long period of major growth, particularly in areas where landlords have the alternative of short-term rentals to turn to. Spitogatos figures show the rental rates being asked in the center of Athens declined by 5.7 percent in Q4 year-on-year to 9.4 euros/sq.m. per month, down from almost 10 euros/sq.m. a year earlier.

Market observers say this downward trend in rental rates should continue over the coming months, at least until the start of the summer, when the increased flow of visitors may turn more owners toward short-term rentals.