Trying to get close to them looks like a vicious circle objective values With commercial prices registered throughout the region. Just a year after their last adjustment, and indeed with “bold” gains in several areas, commercial prices have already recorded significant new revaluation. Looking at the picture in Attica and the Cyclades, where there were significant zonal price adjustments last year, there is still an average deviation of 51%.

It is obvious that the price rally in many areas of Attica in 2022 in a very short period of time again increased the deviation from objective commercial values.

This result is obtained by comparing the average price/sq.m. from contracts declared in 2022 in the Real Estate Transfer Registry of the General Secretariat of Information Systems, in respect of sales transactions carried out in the same areas during the past year (which were processed by the Market Observatory residences TOPO GES IKE). As a rule, the prices indicated in sales contracts are objective prices. Accordingly, the data on the sale prices of used houses (over five years old) carried out in 2022 through the RE/MAX Hellas network of real estate agencies are used for comparison.

The highlight is certainly the island of Mykonos, which also plays a major role in this case (among other things in current affairs), registering a deviation of 227.5%. Characteristically, the average price stated in the contracts registered in the register is 1,985 euros/sq.m, and the average sale price is 6,500 euros/sq.m. Deviations of the order of 52% and 45% are also registered in Paros and Santorini, but they are in line with the average for the rest of the regions.

Large differences are also found in the regions of the northern and southern outskirts. For example, in Kifissia the discrepancy is 65%, as the average sale price last year was 3200 euros/sqm compared to 1940 euros/sqm. the corresponding price specified in the housing purchase and sale agreements registered in the GIS Securities Register. In Chalandri the discrepancy reaches 54%, in Glyfada 47% and in Nea Smyrni 62.2%.

In Mykonos, the average contracted price was 1,985 EUR/sq.m. and the average sale price was 6,500 EUR/sq.m.

Special mention deserves the situation in the center of Athens, where, in the context of the recent restructuring, there has been a significant increase in prices in the zones, on average, about 95%. However, the average selling price is 2,100 euros/sq.m., when, based on the image from the Register of Values, the contract prices are 1,390 euros/sq.m. an average deviation of 51.5%.

Also, according to established practice, the territory where vulnerable social strata and households with a lower economic surface live is a field for the implementation of social policy. Therefore, they always show a large deviation between objective values ​​and commercial prices. So, for example, in Perama, the deviation of two prices in 2022 reached 86.5%, and in Egaleo – 86.5%.

These discrepancies are primarily a result of the financial staff “holding back” price increases in the zones, as market sources report that the recommendations of several appraisers in several zones were for even higher prices. At the same time, however, since the adoption of these recommendations (in 2021) until today, the housing market, especially in Attica and the popular islands of the Cyclades, has recorded price increases that can only be compared to a “bubble”. years in the purchase of real estate during 2002-2009.

According to the latest data from the Bank of Greece, prices in Attica rose by an average of 15.2% per year in the fourth quarter of 2022, also the highest in decades. In general, in 2022, prices increased by 13% per year, while growth in Thessaloniki, major cities and the rest of the country was 11.8%, 10% and 7.4% respectively.

This image was maintained throughout the first quarter of 2023. According to the Spitogatos Property Index (SPI), the average asking price in Attica has increased by 10% compared to the corresponding quarter of last year and now stands at 2,070 euros/m .m. Characteristically, in the first quarter of this year, almost all individual geographical areas of Attica recorded double-digit growth compared to the corresponding quarter of last year. In particular, in the southern suburbs, the growth was 13.2%, where the average price was 3,368 euros/sq.m. from 2 976 euro/sq.m. 12 months ago. An increase of 13.1% was also noted in the suburbs of Piraeus, which, nevertheless, remain the cheapest area of ​​Attica, where the average offer price does not exceed 1,500 euros / sq.m. An increase of 11.2% was also recorded in the western suburbs (€1,635/sqm), while in the north, the average offer price now stands at €2,800/sqm, up 10.3% year-on-year.

However, as seen from the sales dynamics, in areas where interest comes mainly from Greek buyers, the first signs of a slowdown have begun to be registered. According to the Register of Values, in 2022 there was an 8% drop in home sales in the northern suburbs, 15% in East Attica, 12% in Piraeus and 6% in the western suburbs.

Half of the country’s municipalities are asking for a reduction in zonal prices

The persistence of large deviations of objective values ​​in relation to real prices prevailing in the market makes it difficult to “level” and the process of their revision that has already begun in several municipalities.

At the beginning of the year, 44% of municipalities requested a reduction in zonal prices, as they believe that the last adjustment made a year ago included an excessive increase.

There are even cases when municipalities ask to return the zonal prices to the level of 2018! Only in Attica, besides the municipality of Athens, which started the corresponding “dance”, requests for reduction of zonal prices were also submitted by the municipalities of Glyfada, Kallithea, Amaroussi, Vrilissi, Zografou, Agios Dimitrios, Pallini and Moschato Tavros. Among other things, the municipality of Athens demanded a 50% reduction in the increase that was made in 30 areas of its jurisdiction. In Marusya, a general decrease in objective values ​​in areas with purely residential use is required in order for them to return to the level they were in 2018.

The municipality of Glyfada demands an immediate and significant reduction in objective values ​​throughout the city, given that there was an increase that
they even reach 80%. Accordingly, in Vrilissia, by unanimous decision, the municipal council asks to restore the objective values ​​to the level that was in 2021, after the increase from 18.18% to 53.57%.

The municipalities provided detailed opinions, including real market prices. If the process is repeated and new zone values ​​are determined, they will apply from the moment the decision is made and thereafter. However, in any case, the price correction will not end until next summer.

Meanwhile, by the post-election period and closer to the end of the year, the activation of the mass property valuation system is timed, through which from now on automatic adjustment of zonal prices will be carried out in order to normalize the functioning of the market. Since last summer, the system has been tested to ensure that the value it “produces” is reliable and undeniable.

In the first step, the system collects data from various databanks, which it evaluates in order to achieve the desired result, i.e. an estimate of the price of a zone in a certain area.

New data is gradually being added to the mass valuation system in order to have all the necessary elements to form the price of the zone. The ultimate goal is to automatically correct in cases where there are strong fluctuations in selling prices.

“Black” money in the market

Another parameter that the financial staff must consider is how to keep the flow of “black” money into the real estate market and how it will be stopped. The practice of declaring an objective price in sales contracts, and not a commercial one, is a “bright field of glory” for concealing income. It is not uncommon for sellers to ask buyers to pay a percentage of the final price in cash “cash”, that is, without a check, or by transfer from one bank account to another. Contributing to this practice is the fact that today 70-80% of purchases and sales are carried out exclusively for cash. Although at first glance this does not appear to be of any benefit to the seller since the sale of the home is tax-free, however, as market participants report, “this usually happens when the seller is self-employed or self-employed and has debts to the tax office or insurance funds.

Thus, it is possible to avoid the allocation of significant amounts to service these debts. Accordingly, the buyer is incentivized to have the contract quoted at a lower price as this reduces its overall cost to the tax authorities (transfer tax), mortgage office, brokerage and notary fees. For real estate worth 300,000 euros, the notary fee is 3,000 euros, the broker charges 4% of the value, i.e. 6,000 euros from the seller and 6,000 euros from the buyer, and 2,550 euros is the registration fee in the mortgage registry.