Deviations ranging between 15% and 25% on average are recorded in housing purchaseamong those requested sale prices and at the prices at which the purchases and sales are finally made, its operators report real estate market. As they explain, this significant distance arises mainly due to the excessive expectations that many sellers have, especially in the cases of older apartments, which also require the corresponding works in order to be modernized.
“Indeed we find that on average there is a discrepancy of 15%-20%, between the price that one will see in the ad and the one at which the transaction will finally be completed”, Mr. Lefteris Potamianos emphasizes to “K”., president of the Association of Realtors of Athens – Attica. This mainly concerns older properties, since the prices of new constructions completed during this period are clearly more difficult to reduce, as they are more inelastic due to construction costs and contractor profit.
Great Expectations
“The problem arises when the asking prices of old apartments, e.g. 30-40 years old, it is very close to the prices of a newly built property in the same area”, notes Mr. Panos Charalambopoulos, head of the real estate valuation company Solum and member of the Advisory Board RICS Greece. According to him, in these cases, which are a generalized rule in today’s market, to complete a transaction significant concessions will have to be made on the part of the owner.
Recently, an elderly apartment in Kolonaki it was sold for €900,000, when the initial asking price was €1.2 million, i.e. 25% higher. In fact, this apartment also needed significant renovation. Therefore, in order to sell, the price had to be significantly reduced, as the seller had effectively included the cost of the renovation in the asking price, even though the relevant work had not been done.
Many properties remain unsold for years due to the excessive demands of their owners.
Accordingly, in the cases of many sales ads apartments in the north, or in the southern suburbs, excesses are observed, as money is requested that does not correspond to the real value of these properties. For example, a 105 sq.m., 35-year-old, first-floor apartment in Maroussi it is being asked for €350,000 and is being advertised as refurbished, although as can be seen from the relevant photos, the only work that has been done is a paint job. In fact, such a property will only find buyers if the final sale price is reduced to around 300,000-310,000 euros and that is if no serious renovation work is required.
Energy upgrade
It is worth noting that most of the properties over 20 years old that are currently available for sale will become unmarketable in a few years from today, if the recently passed Community directive is adopted without variation. This stipulates that those houses that are currently in the two lowest categories of the energy certificate (basically properties without insulation and/or natural gas) will not be able to be rented or sold from 2030, if they are not upgraded in terms of energy by at least two categories. This means additional costs for today’s interested buyers should they wish to invest in their property a few years from now.
Sources from brokerage market they also talk about cases of owners who, as soon as they realize that there is interest in their property (e.g. through phone calls from interested buyers who want to see it in person) rush to immediately increase the asking price, apparently thinking that they value it lower than its true value. In fact, they overprice it relative to its commercial value, killing demand as potential buyers become discouraged and turn to other options or, even worse, abandon the home buying search altogether, precisely because of the very high asking prices. The result is that many properties remain unsold even for years, due to their unrealistic valuation.
As explained by Ms. Anna Mokakou, head of the New Life Real Estate brokerage office, “a very key factor contributing to keeping sales prices at a high level is the tendency of many owners to do their own property appraisals by surfing the Internet. The result is, often, that they price their property according to their financial needs and expectations in relation to that sale. Thus, unfortunately, many of the requested sale prices have not resulted from a certified appraisal, but from the above-mentioned incorrect practices.”
