Households’ investment in homes has slumped since the period before the economic crisis. After the end of the first quarter of 2016 it is estimated at 1.2 billion euros on a 12-month basis, compared to an annual amount of 8.11 billion euros in 2008, representing an 85 percent fall, according to Bank of Greece study.
Data analysis shows that households began reducing their investment in homes in the first quarter of 2008, some six months before the start of the price drop that continues to date. Since then investment has followed the trend set by prices, one of constant decline.
Property prices grew by 82 percent from 2000 to 2009, but since then they have declined by about 40 percent.
The BoG analysts noted that a part of Greeks’ wealth has been invested in properties abroad, with some of those investments being financed by the deposits they withdrew from the local credit system.
The slump in household investment brought about an even greater decline in investment by constructors: Hellenic Statistical Authority data showed that investment in building new homes dropped 95 percent from 2007 to mid-2016.