The Greek housing market posted the second-worst performance among European Union countries in the third quarter of 2013, as according to Bank of Greece data prices fell at an annual rate of 9.2 percent following five years of decline. Eurostat announced on Tuesday that Greece was only second to new EU member Croatia in terms of the drop in house prices.
At the same time a slowdown was observed in the rate of decline across the eurozone, with the average fall coming to just 1.3 percent in Q3 compared to an annual slide of 2.4 percent in the second quarter. Across the EU the drop amounted to no more than 0.5 percent.
The Greek property market picture is unlikely to change in the next few months, even though the total price decrease has reached 32 percent across the country since the start of the financial crisis.
Bank of Greece data published in a recent report point to an average waiting time of 12 months from when properties are put on the market to the actual sale, compared with just five months in 2009. The situation in the local market is rapidly deteriorating, as it was only two months earlier that the country’s central bank had estimated the average waiting period before a house is sold at 10 months.
Similarly, on average, buyers are able to negotiate 21.5 percent off the asking price, while in early 2009 the difference was just 12.6 percent.
The Bank of Greece noted that the market continues to be dominated by excessive supply and a considerable decline in demand, which should be attributed to the major increase in unemployment and the reduction in households’ disposable incomes, the rise in property taxes, the instability of the tax framework and the lack of cash flow given banks’ very strict loan terms.