Greek property prices fall 7.5 pct in Q1

Greek property prices continued to fall in the first quarter, even though the economic recession eased, as squeezed household incomes, record-high unemployment and tax increases still took a toll, data showed on Tuesday.

Property accounts for a large chunk of household wealth as Greece has one of the highest homeownership rates in Western Europe – 80 percent versus a European Union average of 70 percent – according to European Mortgage Federation data.

Bank of Greece figures showed that apartment prices fell 7.5 percent in the first three months of 2014 from a year earlier, after an 8.6 percent decline in the previous quarter.

Higher property taxes to help plug budget deficits, coupled with tight credit from capital-strapped banks and a jobless rate hovering near 27 percent have pressured the market as Athens struggles to emerge from a crippling debt crisis.

Based on the central bank data, apartment prices have plunged 34.7 percent from a peak in 2008, when the country’s recession began.

The property market could start to see some relief if the economy pulls out of a six-year recession this year.