Greek property prices rise for a third consecutive quarter

Greek property prices rise for a third consecutive quarter

A recovery in Greece's residential property market gained momentum in the third quarter of 2018, central bank data showed on Monday, suggesting an improving economy and growing foreign interest may help property prices rise further.

Property accounts for a large chunk of household wealth in Greece, which has one of the highest home ownership rates in Europe at 80 percent, versus a European Union average of 70 percent, according to the European Mortgage Federation.

Prices of the apartments in which most Greeks live rose 2.5 percent in the quarter from a year earlier, Bank of Greece data showed, with the recovery accelerating from an upwardly revised 1.2 percent increase in the second quarter of the year.

More specifically, prices have risen by 3.7 percent year-on-year in Athens, where home-sharing platforms like Airbnb and a "golden visa" programme — a renewable five-year resident's permit in return for a 250,000-euro ($285,000) investment in real estate — have grown very popular.

Prices had slid 1.0 percent in 2017 from a year earlier, taking the cumulative fall since 2008, when the country's protracted recession began, to 42 percent.

"The trend seen in the beginning of the year is strengthened further and reflects belatedly an improvement in economic conditions", said National Bank economist Nikos Magginas.

"Airbnb has driven rents higher and creates positive prospects for the real estate market and optimism for a continued upward trend, mainly in Athens."

The market has been hit by property taxes imposed to plug budget deficits, tight bank lending and a jobless rate still around 19 percent, the highest in the 19-nation euro zone.

Greece's economic prospects have improved since it signed up to a third bailout package worth up to 86 billion euros ($107 billion) three years ago.

Its 180 billion-euro economy expanded for a sixth straight quarter in the period through June this year, but at a slower pace than the quarter before, on weak investment spending. [Reuters] 

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