Residential property price slide picks up pace in Q2
Greek residential property prices declined at a faster pace in the second quarter than the first, data showed yesterday, as Greece’s slide back into recession hit household incomes and employment. Property accounts for a large chunk of household wealth in Greece, which has one of the highest home ownership rates in Europe – 80 percent versus a European Union average of 70 percent, according to the European Mortgage Federation. Bank of Greece data showed that apartment prices fell 5.6 percent in the second quarter of 2015 from a year earlier. The annual pace of decline accelerated from 4.1 percent in the first three months of the year. The pace of price declines had begun to ease after a 10.8 percent drop in 2013 up until the first quarter of 2015. Residential property prices have dropped 40.5 percent from a peak hit in 2008, when the country’s recession began. The real estate market has been hit by property taxes which the government imposed to plug budget deficits, a tight credit market and a jobless rate hovering near 27 percent. Apart from their negative wealth effect, falling property prices also affect the collateral value on banks’ outstanding real estate loans.