Cash is king when house-hunting
Only one in every four residential property transactions involved bank credit last year
More than 40,000 residential properties were sold in Greece last year, according to estimates by real estate associations. Notably, three-quarters of those transactions were made exclusively in cash – without the intervention of a credit institution.
Kyriakos Kampouris, founder and chief executive of Individual Mortgage Solutions, told the recent Premium Real Estate Forum in Athens that only 25% of house transactions are conducted with the contribution of bank credit. His company cooperates with all four systemic banks, as it offers its clients advice on mortgages.
Given that the latest Bank of Greece report on credit stability cited the issuing of 10,685 housing loans in 2021, it follows that more than 40,000 houses changed hands in Greece last year. This is a particularly satisfactory figure, when one considers the significant impact of the pandemic for a large part of the year.
On the other hand, it becomes clear that the property market has not yet returned to normal, at least the kind of normal seen in the period before the financial crisis of the 2010s. The picture then was the opposite of what it is today, as over 80% of residential property transactions were conducted using bank credit, and less than 20% went ahead without the participation of a credit institution.
Since the start of the previous decade, with the effective departure of banks from housing credit, cash has become king in residential transactions, a trend apparently continuing even though house prices are neither low nor are banks avoiding involvement in mortgage credit.
Nevertheless it is clear that the stricter criteria of loan issuing has had a negative impact on the increase of transaction volume and of new mortgage issues. Lefteris Potamianos, the head of the Athens-Attica Estate Agents Association, told the same forum that “if bank credit was available for them, more households would have started the process of acquiring a house,” adding that several clients started off looking to buy a property but eventually rented one instead.
