Prices and rents are rising, and together with this “inflating” the expectations of the owners about the returns they can get from the real estate their. Comparing them rents asking in the advertisements with the real prices that the lease contracts are signed, one finds that the landlords in Chalandri, Marousi or Agia Paraskevi ask for rents at the levels of the real rents in Kifissia. In Aegaleo and Haidari the ads have amounts that are actually given for renting houses in Kastella and Pasalimani.
This shows that there is a gap between expectations and reality, which prospective tenants can exploit when negotiating, in order to contain the already high – and constantly increasing – cost of housing.
Variations up to 45%
The above conclusions are based on a comparative research of “K”between the average asking rental prices derived from posted advertisements and the actual prices at which leases are signed.
Thus, utilizing information on asking prices from the online classifieds network Spitogatos Insights and data from the actual prices at which lease contracts are made, based on the latest annual report of the estate agency network RE/MAX Greecearise large deviations, up to 45%, an example of many landlords’ lack of information about the real price their property can be rented for, or even their mistaken belief that there is demand at their asking prices. This is a finding that reveals the “parallel reality” that many homeowners find themselves in and is indicative of the difficulty seen today among the majority of interested tenants.
Tenants have great leeway to reduce the initial rent requested by the landlord.
Of course, the greater the discrepancy between the asking and actual prices, the more difficult it is to make transactions, i.e. rentals. The phenomenon is more evident in the cheapest areas of Attica, where, as observed, many owners think they can attract tenants, even though they ask for prices that correspond to much more expensive areas.
For example, in Kypseli the average asking price today amounts to 8.2 euros/sq.m., 30% more than the price at which rental contracts are actually concluded, i.e. around 6.3 euros/sq.m. In Keratsini, the average asking price is 7.1 euros/sq.m., 36.6% more than the actual price of 4.5 euros/sq.m.
In practice, the owners in the area have come to ask more than 700 euros/month for a 100 sq.m. apartment, when the demand that exists does not want, or cannot offer more than 450 euros. Accordingly, in Aigaleo, prices of 880 euros are requested for a property of 100 sq.m., when the average price at which rental contracts are made is 650 euros, a deviation of the order of 35%.
The expensive suburbs
On the contrary, in the more expensive suburbs of Attica, such as e.g. Chalandri, Marousi and Kifissia, the discrepancies range between 12.7% and 20%. Even there, of course, there is a significant “gap” between supply and demand in terms of prices, but it is easier to bridge and reach agreements. Of course there are also areas where the market works more rationally. Such are considered e.g. Nice (deviation of only 1.4%), Galatsi (deviation of 6.5%) and the region of Kastella and Pasalimanio (deviation of 13%).
Between 10% and 15% the average deviation
The distance between asking and actual rental prices is also reflected in published surveys. For example, according to data from RE/MAX Greece, during the 12 months that ended this October (October 2022-2023), the average rent increase in Attica was 5.3%. This is based on the prices at which the rental contracts are concluded. In the northern suburbs, the average price is 9.2 euros/sq.m., while in the center it does not exceed 8.3 euros/sq.m. On the contrary, based on the asking prices of Spitogatos.gr ads, the average rent in the northern suburbs, during the third quarter, reached 10.77 euros/sq.m. That is, it was 17% higher compared to the actual prices. Accordingly, in the center of Athens, the average asking price was 10 euros/sq.m., compared to 8.3 euros/sq.m. which were the prices at which trades were made, a deviation of 20.4%. In the western suburbs, the average asking rental price has now increased to €7.8/sq.m., when leases are at €6.4/sq.m., almost 22% lower.
As reported by real estate agencies, as a rule, the average discrepancy between the advertisements and the prices at which lease contracts are signed is of the order of 10%-15%, which has always been the case. That is, usually the owners who are interested in renting out their property, adopt an asking price a little higher than what they would be happy with, so that they have some room to negotiate with the interested tenants. In cases where this percentage is much higher and moves between 20% and 40%, or even higher, it is obvious that there is a wrong assessment of the price that the market is able to offer.
Landlords always start at a higher price so they have room to negotiate.
This explains the “belligerent” mood that has developed in recent years between many landlords and tenants, especially in the relevant social media groups. When there is such a large gap between the “wants” of one side and the other, it is obvious that the market is not working smoothly.
According to RE/MAX’s analysis, in Attica, in most areas, properties with a surface area of 51 sq.m. or more are preferred. up to 75 sq.m. and aged between 16 and 20 years, while in the areas of the northern suburbs the largest properties with an area of 101 sq.m. were selected. up to 150 sq.m. and to the south from 76 sq.m. up to 100 sq.m. In the center of Athens, in first demand are older properties aged 20 years or more with an area ranging from 51 sq.m. up to 75 sq.m. In Western Attica and Piraeus, the demand concerns apartments between the ages of 16 and 20, with an area of 51 sq.m. up to 75 sq.m., i.e. the same as in the center of Athens.
