ECONOMY

Property prices seen falling even further as 2013 draws to a close

Cash-strapped developers have been adopting somewhat unusual practices in the last few weeks, in a desperate attempt to rid themselves of unsold apartments.

The market has seen several instances of two or three properties being offered as a package at considerable discounts or rock-bottom prices. For instance, one construction company is offering four maisonettes for 2 million euros instead of 2.4 million which would be their value if sold separately.

Realtors take the view that such examples will proliferate in coming months, as the stock of properties up for sale increases. This is now estimated at around 200,000, of which 60,000 are country houses.

For the time being, the practice of offering generous discounts mainly applies to country houses, with developers hoping that non-EU nationals will avail themselves of the opportunity to being granted residence permits for up to 10 years if they invest more than 250,000 euros. As prices have dropped by around 30 percent in the last three years, a discounted “package” facilitates meeting the condition of the minimum sum.

Another interpretation of the trend, however, is that so far developers have avoided paying the emergency property tax paid via electricity bills by not connecting their properties to the power grid. As this loophole will probably be abolished next year, developers are certain to offer even bigger discounts as 2013 draws to a close. And so the pace of declining prices may accelerate (it was 11.6 percent in the second quarter, according to the Bank of Greece), making it likely that the cumulative average drop may reach 40 percent by the end of the year.

Bank officials estimate that the number of newly built properties sold in the first half was in no case higher than 4,000, from some 10,000 for the whole of 2012.