Property prices in Greece will slide further in 2014, Alpha Bank has forecast in a study.
“The property market’s recovery is expected to be relatively delayed, as it mainly depends on a normalization of the taxation regime, but also on the restoration of confidence in the prospects of the economy’s recovery and growth, on a steady strengthening of household incomes and a significant rise in stable employment,” Alpha Bank’s analysts said in its weekly economic bulletin.
“Overall, the significant slowdown in the downward trend for apartment prices in the first half of 2014 also signals a slowdown in prices for the year as a whole, at around -6.3 percent. The prospects of apartment prices stabilizing are significantly strengthened from 2015, particularly if the forecast for real GDP growth of 2.9 percent proves correct,” the report continues.
Despite the steep drop in prices and the significant number of homes for sale – often at prices below the actual value – transactions continue to dwindle, as sellers have begun anticipating that the value of their property will not fall any further, while buyers appear to be expecting a further slide, according to the report.
The average waiting period before houses are sold was estimated at about a year in the first months of 2014, against around five months in 2009. The number of transactions carried out with the help of banks fell to 3,003 in the second quarter of 2014, from 4,008 in the first quarter and 5,121 in the second quarter of 2013.
Such figures contrast dismally with 148,100 in 2007 and 30,900 in 2012.
Rents recorded a cumulative rise of 42.9 percent in the 2000-11 and began falling in 2012 (-2.1 percent), while the slide gathered pace in 2013 (-6.8 percent) and the first half of 2014 (-8.9 percent, y-o-y). However, the pace of decline in rents slowed down to 7.3 percent on an annual basis in July from 9.7 percent in January.
Alpha Bank draws attention to the fact that the prices of prime real estate for business premises have stabilized this year and the forecasts for upmarket properties in the tourism sector are even more positive due to the tourist boom.
On the whole, the market continues to be marked by especially low demand and excess supply.