ECONOMY

Property market doldrums to linger for several years

Demand in Greece?s residential property market may fall to record lows in coming years, affecting prices and businesses operating in the sector.

According to a survey of 1,092 people conducted by the Athens University, almost 80 percent of respondents ruled out the possibility of buying real estate in the next two years.

Asked about the possibility of buying a holiday home, nine in ten opposed the idea.

Views among builders are just as downbeat with just over 80 percent of construction companies forecasting that the crisis in the industry will last for at least two to three years while 66 percent said that prices are seen further retreating in coming months.

According to Epameinonda Pana, the head of the university?s statistics department which conducted the survey in October and November last year, there are no positive signs from the market at a time where concerns about job security are very high, harming confidence among homeowners to repay future loan payments.

Seven in ten of respondents said that the crisis has made them more uncertain about their ability to meet financial obligations regarding their housing needs, such as meeting mortgage payments or paying rent.

In regards to property values, just over half of home owners believe that their assets have become cheaper while 13.3 percent said that their home has increased in value.

Another factor creating downward pressure on property prices are the growing number of foreclosures.

According to the university, the number of properties taken by banks in order to pay off mortgages rose to 609 in December last year, from 291 in the same month in 2007.