Slide in property prices eases

Bank of Greece data showed Greek property prices declined at a slower pace in the second quarter of 2014, Reuters reported on Wednesday.

Apartment prices fell 7.3 percent from a year earlier. The annual pace of decline, which was 8.5 percent in the first three months of the year, has gradually eased since the third quarter of 2013.

Prices have fallen more than a third since peaking in 2008, when the country’s recession began.

The market has been hit by property taxes which the government has raised to help plug the budget deficit.

Apart from their negative wealth effect, falling property prices also affect the collateral value on banks’ outstanding real estate loans.

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