Property prices take another tumble

The decline in property prices continued unabated in the second quarter of the year, amounting to 11.6 percent on average on an annual basis, Bank of Greece data showed on Friday.

Given that at the end of last year the price drop since the start of the crisis was estimated at around 30 percent, it is clear that unless a major change takes place in the market by the end of this year, prices will be heading for a 40 percent slump compared to the end of 2008.

Revised BoG data showed that in the first quarter of 2013 the average decline in property prices came to 11.3 percent year-on-year, while for the whole of last year the decrease from 2011 amounted to 11.7 percent.

The central bank’s survey also revealed that the prices of older properties are falling faster this year than new property prices, which points to the fact that the sellers of the former are more eager to get them off their hands so as to get money to cover their obligations. As a result, they are willing to drop their asking prices to lower and lower levels.

In the period from April to June 2013, new apartments posted an annual price decline of 11.3 percent, against an 11.8 percent drop as far as older flats are concerned. Revised data for the first quarter showed a 10.3 percent slide in prices for new apartments and 12 percent for older ones. This means that older apartments have pretty much kept the same decline rate while the fall has accelerated for new houses.

The city of Athens is now experiencing the fastest drop in prices around the country, averaging at 12.7 percent, compared with Thessaloniki’s 10.5 percent fall in the second quarter of 2013, while in 2012 Athens had seen an 11.8 percent drop against Thessaloniki’s 13.6 percent. In other major Greek cities prices declined by 11.5 percent while in other areas the fall amounted to no more than 10 percent in the April-June period.

Property valuations by banks also point to a market contraction, as the total number declined from 5,600 in the first quarter of the year to 4,500 in the second, taking all first-half valuations to just over 10,000. Compared with the second quarter of 2012, the Q2 decline is equal to 35.3 percent, Bank of Greece data showed. Valuations came to 30,400 for the whole of 2012.