Two-speed real estate in Attica: why the south is overtaking the north

Housing prices in the southern suburbs are rising faster than in the northern suburbs, and strong demand is forcing developers to buy land at high prices. The gap between the southern and northern suburbs of Athens is widening as real estate prospects on the coast of the capital far outweigh those around Kifissia. Foreign buyers and Greek investors alike highlight the positives offered by the southern suburbs, where house prices in some cases have risen by more than 40 percent over the past year.

"In the north, the market moves like a tortoise, when in the south it moves like a hare," Yannis Xylas, CEO of real estate valuation company GEOAXIS, told Businessdaily.gr.

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Although both areas offer natural beauty, similar infrastructure and impressive residential developments, the south takes the lead. The project in Elliniko, the direct access to the beach and the relatively close distance from the center of the capital play into the hands of the southern suburbs, experts emphasize. In addition, geography favors real estate prospects in the South. "In the south, a future expansion eastward toward Sunion is possible. The north is surrounded by three mountains, Parnitha, Penteli and Imittos," says Xylas.

In areas such as Glyfada, Voula and Varkiza, buyer interest remains high despite rising interest rates and limited supply. Market sources say that developers are "jacking up" prices on land plots, seeing strong buyer sentiment.

"There's a big profit margin for developers in the south that isn't there in the north," Wood emphasizes.

This is a strong trend that is also reflected in prices. According to Spitogatos.gr, home prices in the southern suburbs rose 13.2 percent in the first quarter of the year, while those in the north rose 10.3 percent. It also notes that the second quarter of 2022 had a similar pattern, with prices in the south rising 13.8% and 8.8% in the north.

The bid for the northern suburbs

The more encouraging picture of the southern suburbs compared to the northern suburbs is one of the conclusions of the latest Land Price Observer 2023 report released by GEOAXIS a few days ago.

In examining different property categories, GEOAXIS says that land as well as apartments, student residences, warehouses, logistics centers, data centers and nursing homes are the most resistant properties to declining values in a pan-European context.

"At the opposite end of the spectrum are stores, shopping centers and low-end offices. We believe that despite the low returns they offer, land will add an important element to investors' portfolios over the coming years," the company emphasizes.

"Value growth is expected to continue over the next 12 months, but at a slower pace. The market is by no means in bubble conditions as the imbalance between supply and demand for new buildings is supporting construction activity," the company adds.

Despite two different speeds in the land market, depending on location, the overall trend remains upward.

"Positive signaling and value growth are also anchored in 2023, as all of the study areas in the basin recorded their fifth consecutive increase in potential land sale price. The increase averaged 5.31% over Q2 2022. Value growth is expected to continue over the next 12 months, but at a slower rate. The big bet is the recovery time of land values in the northern suburbs," the company explains.

It is noted that since the beginning of 2018, buildings have been under construction, which are mainly located in medium and prestigious areas (Agia Paraskevi, Paleo Faliro, Glyfada, Voula, etc.), where land plots were bought inexpensively during the crisis and the rates of consideration, if agreed, were not prohibitive relative to the then construction costs. What these new buildings have in common is that they are largely financed by the developers themselves and provide high standards of housing in buildings with distinctive architectural design, especially in terms of their facades and energy footprint.