A further decrease in property prices is expected in coming months due to the crisis, according to the Bank of Greece, but the decrease is not seen as being steep.
According to a central bank report released on Monday, prevailing economic conditions are seen helping preventing a sharp correction in real estate asset prices after a four percent price drop last year and a 3.7 percent retreat in 2009.
Real estate assets are resilient due to the very high rate of home ownership in Greece, the low number of transactions taking place in the sector and high costs of transferring real estate assets, the report pointed out.
On the other hand, hikes in building costs outpaced rising inflation in the 2004-2008 period, preventing price drops. Despite the recession, construction costs continued to rise in 2010, the report added.
Supply levels in the property market continue to be high as a large number of recently built apartments remained unsold in market conditions that have existed for the last few years.
?On the supply side, a reserve of unsold homes created as of the end of 2008, is estimated to have remained constant in 2009 and 2010. The reduction in private building activity in the last two years was roughly in line with the drop in the number of property transactions taking place,? the report said.
?The number of new permits issued in 2009 fell by 16.1 percent and 10.9 percent in 2010 while the total number of real estate assets sold fell by 13.9 percent in 2009.?
According to a survey put together by the Athens University recently, demand in Greece?s residential property market may fall to record lows in coming years, affecting prices and businesses operating in the sector.
Almost 80 percent of respondents surveyed ruled out the possibility of buying real estate in the next two years, the survey found.