Greek property prices continued to fall sharply in the third quarter even as economic recession eased slightly, central bank data showed on Friday, with squeezed household incomes, record high unemployment and tax increases taking a toll.
Property accounts for a large chunk of household wealth as Greece has one of the highest home ownership rates in western Europe – 80 percent versus a European Union average of 70 percent – according to European Mortgage Federation data.
Higher property taxes to help plug budget deficits, coupled with tight credit from capital-strapped banks and a jobless rate above 27 percent have pressured the real estate market as Greece struggles to emerge from a severe debt crisis.
The Greek economy shrank by 3 percent in the third quarter from a year earlier, its smallest contraction in nearly three years as a rebound in tourism helped, but the residential property market remained depressed.
Bank of Greece data showed that apartment prices fell 9.6 percent in the third quarter from a year earlier.
The property market could start to see some relief if the economy returns to growth next year. The government forecasts 0.6 percent economic growth in 2014.
Based on the central bank data, apartment prices have plunged 31.6 percent since their peak in 2008, when the country’s six-year recession began.
The annual price declines have accelerated since 2010 when the country’s debt crisis exploded. Prices fell 4.7 percent in 2010, 5.5 percent in 2011 and 11.7 percent in 2012. [Reuters]