First signs of stability in house prices

Fitch Ratings has discerned the first signs of stabilization in the Greek property market, as the decline in prices has slowed considerably in the second half of this year.

In a report published on Tuesday, Fitch forecasts a 6 percent annual decline in prices at the end of the year following the 3.7 percent drop already recorded in the first half of the year. Since peaking in January 2009, prices have fallen on average by 37.8 percent.

Fitch notes that prices are now dropping at a markedly slower rate, while some areas of the country, such as the city of Thessaloniki, have observed a stabilization in prices.

It also highlights two recent legal interventions aimed at bolstering house transactions, these being the reduction in the transfer tax to 3 percent, from 8-10 percent, and the improvement in the capital gains tax framework by exempting all properties acquired before 1995. However Fitch stresses that the interventions will have a minimal impact on transactions, which will remain at particularly low levels.

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