The decline of residential property prices continued in the second quarter of the year, according to figures released on Thursday by the Bank of Greece, at a time when many were hoping the market would bottom out and start to stabilize.
Data showed prices down 1.2 percent in the April-to-June period this year compared to a year earlier. The drop in the first quarter of the year amounted to 1.7 percent, while the fall for the whole of 2016 had come to 2.4 percent on an annual basis.
The decline has therefore slowed somewhat, thanks to improved conditions in the economy during the spring compared to the start of the year, when uncertainty had culminated as a result of the constant delays in the completion of the second bailout review.
Central bank statistics revealed that apartments more than five years old experienced a steeper price slide in Q2 in comparison with new-builds, at a 1.3 percent rate against 1 percent. In contrast, the revised Q1 figures showed a decline of 1.9 percent for new homes against 1.6 percent for older ones, meaning that in the second quarter of the year the picture was reversed in favor of newer residential properties.
Across Greece the smallest decline was seen in countryside homes, whose prices fell just 0.6 percent, confirmed the trend observed since the start of the year with the rekindling of demand from abroad. On the other hand, Athens saw a 1.2 percent decline in Q2 and prices in Thessaloniki shrank 1.3 percent, while other major Greek cities averaged a 1.7 percent drop. In all cases the rate of decline has eased since the first quarter.
As BoG recently pointed out in its intermediary report on monetary policy, “the main features of the market remain the limited demand and the excessive supply, which can be attributed to the adverse financial environment and the tax burden on property.”
The total average decline in property prices from late 2008 to the second quarter of 2017 reached 43 percent, while in the country’s two main cities it was even higher, at 44 percent in Athens and 46.5 percent in Thessaloniki.