Property transformations in the centre of Athens during the economic crisis years (2009-2018). The case of Exarcheia.

As it turns out (table 4, graph 2), Greeks have dominated property sales in the area during the whole decade, reaching the lowest point in 2014 and returning to the levels of 2011 by 2018.

Table 4: Number of property purchases by Greek and foreign citizens per year (natural persons)

Foreigners were accounted for a very small part of the transactions during 2009-2013 (for example, 2009: 5,2% of all transactions by people). From 2014 onwards, their participation in the local real estate market started growing. In 2014 16,4% of assets were purchased by foreign nationals with this percentage reaching 21,3% in 2015, 17,2% in 2016 and 24,9% in 2017. Suddenly, in 2018 this group accounted for 42,5% of all transactions between individuals (not legal entities) and the 42% of all sales to foreigners during the decade.

Graph 2: Percentage of property purchases by Greek and foreign citizens (natural persons)

The property purchases by legal entities (graph 1) accounted only for the 21,6% of the total sales of 2009. Their involvement in the local market continued to fall during the first half of the 2010s, and hit a low point at 2013 (6,6%), a decline that is in line with the broader situation in the local real estate market at that time. In 2014, the participation of legal entities in real estate transactions rose to 31,3% of the total, to sharply fall to 14,5% in 2015 (year of government change). The decline continued for both subsequent years (12,6% in 2016, 5,7% at 2017) to rise up to 18,5% in 2018.

Legal entities

During the examined period a total of 127 legal entities bought 452 property rights in the area. Most legal entities bought just one property (73 out of 127). Two properties were bought by 22 legal entities (9,73% of the total sales by legal entities), and three properties by 11 legal entities (7,3% of total). As a result, 33,18% of all property sales that involved legal entities concerned owners buying 1-3 properties (table 9).

Table 5: Number of property purchases by legal entities per year

On the contrary, there were 8 legal entities that bought a large number of properties (over 10). Those 8 companies bought almost half (49,55%) of all property rights that bought by legal entities during the crisis decade. Interestingly, the 73 sales conducted just by one company account for the 16,67% of all property sales by legal entities during the crisis decade.

Regarding the ownership percentage bought, 407 of legal entities (90% of total) acquired a whole property, and the rest smaller percentages. In one case, a company acquired 15% of 31 properties in the same building.

Concerning the type of legal entities involved, most of them (33) were As for their business sector, most of them were investment, real estate and leasing companies.

However, not all legal entities were companies. Among those recorded were social security funds, (business) chambers, associations, organizations or the church. Most of those actors bought only one property.

As for their locational preferences, one third of the properties bought were located in Akadimias str. Also, a number of properties were located in Koletti, Ippokratous and Zoodochou Pigis streets.

Natural persons

As the findings show out of the 3.132 transactions of property rights 2.221 were made by 1.658 Greeks and 459 from 336 foreigners. An interesting observation in the statistics per year (table 13) is that transactions by foreigners were limited in the beginning of the economic crisis (for example, 5,2% of all sales by natural persons in 2009, 3,3% in 2010). However, foreigners increase gradually their participation in the local market, to account in 2018 for half of all transactions by natural persons (Greeks and foreigners) – 21,3% in 2015, 17,2% in 2016, 24,9% in 2017 and, suddenly, 42,5% in 2018.

This finding clearly points at the dramatic weakening of the locals’ purchasing power, and the growing number of foreigners (and companies as well) looking for deals in a promising real estate market and purchasing properties in Exarcheia.

Table 6: Number of property purchases by natural persons per year

Another interesting finding is that there was no property consentration, as most natural persons (61,6%) bought only one property (a total of 1.660 property rights). Only 1,3% bought 5 property rights (table 6).

Nationalities

During 2009-2018, people from 42 countries bought properties in Exarcheia (table 7). In the Land Registry database foreigners were recorded as non-Greeks – the place of permanent residence was not examined as in todays globalized environment it does not have a decisive force. In this context, people with Greek names, that are citizens of other countries (Greek diaspora) were categorized as foreigners.

Table 7: Number of property purchases by foreign citizens and number of buyers by nationality (2009-2018)

The analysis of the sale contracts based on the nationality of the new buyers (table 7) confirms the general belief that Israeli (at a larger extent) and Chinese (at a lesser extent) were among the nationality groups involved in an important number of transactions . The second largest nationality group (after the Israelis) was unexpected: Albanians. A number of buyers were also from France and Cyprus. In general, half the foreign buyers were nationals of four main countries (Israel, Albania, France, Cyprus).

Maps 9-12: Location of sales and purchases per buyer nationality

As for the number of properties acquired by non-Greek nationals (table 6), Israelis remain at the top of the list, with 74 properties in the broader Exarcheia area (16,2% of all sales by foreigners). Chinese nationals are in second place, with 52 properties, together with Cypriots. Albanians are in fourth place, with 42 properties, followed by the French (39 properties) and Turks (29 properties). Generally speaking/In general, about half of all properties (47,9%) bought by foreigners, were bought by people from 4 countries (Israel, Cyprus, China and Albania).

Conclusions

The analysis of all sale contracts concluded during the economic crisis and for assets in Exarcheia reveals that a large number of the properties bought, especially after 2015 moved form long term to short term rentals. This conclusion emerges indirectly (from the rising number of Airbnb listings and reports on long term rentals rise up to 30-35% in 2018) but also directly from the findings of this research. As this study shows purchases concern also whole buildings which have been transformed into hotels. Additionally, new buyers concerned often individuals or companies involved in the hospitality sector. The statues of companies buying properties in Exacheia clearly stated that their purpose is managing and short-term renting properties.

The image of decadence associated with Exarcheia during the economic crisis in the public debate seems to have helped, if not fostered, real estate speculation. The consecutive clashes with police forces, the destruction of public and private property and drug dealing, have all supported this image and surely discouraged new residents form moving in Exarcheia. At the same time, those events had a negative effect on the permanent residents, with some of them moving away, as a consequence of the area’s degradation and criminality. The price decline, centrality and the youthful, revolutionary, and alternative character of this particular area (promoted as being part of a “travelling experience” recently), have initially encouraged sales in Exarcheia. However, it remains unknown to what extent the promoted negative image of Exarcheia (the portrayal of Exarcheia as a no-go zone, where anarchy and drugs rule), has been entwined with other political or economic motives aimed at first pushing down property prices and subsequently “normalize” the area through real estate development. This question may be easy to assume but difficult to prove. Undoubtedly, the real estate capital looks forward to this “normalization” by investing in properties and short-term rentals, as long as this does not change this areas’ “branded” character. In any case, it is very interesting that an area portrayed in the public debate as a no-go zone is directly targeted by local and foreign capital, to the extent that shows signs of gentrification.

[1] Main photo: Avgi newspaper, Μπλε Πολυκατοικία: η ιστορία και ο μύθος της, 11/12/2013