Thousands of assets ready for auction

The Greek property market is about to welcome a host of new offerings as the companies that manage loans secured on properties either for banks or the funds that have acquired them are resuming online auctions in large numbers.

This wave of auctions will concern between 250,000 and 300,000 properties, according to data presented last week at the NPL Forum organized by the DDC Financial Group. Those assets are now considered mature for liquidation through the e-auction platform.

Addressing the same conference, Theodoros Athanasopoulos, the chief executive at Cepal, one of Greece’s top three servicers, pointed to the completion of 40,000-50,000 auctions per year. Such figures, he said, “are not unprecedented in our country, as that was the number of property auctions implemented every year before the outbreak of the financial crisis in 2008.”

The return to auction normalcy will also determine “the success of the securitizations conducted through Hercules,” he stressed, referring to the state’s asset protection scheme. This is because the asset sales will not only constitute an incentive for the arrangement of those loans, but they will also be the main source of revenue for servicers to meet the targets they have committed themselves to in their business plans.

Their objective is to avoid the reduction of their payment or even have the state collateral activated, as the Hercules law dictates when the arrangement of bad loans drops under a certain level.

Athanasopoulos estimated that the automatic reduction of a property’s price without a court decision, as the Justice Ministry bill provides for, will help auctions. He did note, however, that investors need to have a clear investment policy in the property sector so as to avoid a drop in prices.

Interest in bad-loan management and in collaterals has also attracted the attention of investors from abroad. “Greece is the most active country in the securitizations market,” Michalis Haralambidis, risk management director at the Hellenic Financial Stability Fund, told the same event. He went on to note that “Greek banks will account for 36% of upcoming transactions in Europe over the next few months.”