Residential property prices continued to edge higher over the third quarter of the year, as according to figures released by the Bank of Greece on Monday there was a 3.2% annual increase. However, the growth rate slowed for a third consecutive quarter.
House prices grew by 7.2% year-on-year in 2019, while the annual increase in the first quarter came to 6.5% and in the second it stood at 4.1%.
It should also be noted that there is a time lag of about six months before the actual market data is incorporated in the BoG statistics. Sector professionals stress that some time is required for the property market to adjust to developments in the economy.
Based on July-September data, the biggest annual increase on average was to be found in Attica, at 5.6%, while in Thessaloniki the rise amounted to 4.3%. In Greece’s other major cities there was actually a drop of 0.3%, and in the rest of the country prices grew 1.5%. Last year the revised data showed the annual increase in prices at 10.5% in the capital, at 6.9% in Thessaloniki, at 3.7% in the other big cities and at 4.5% in the rest of the country.
Prices for newly built houses increased 4.2% in July-September, while those of older residences grew 2.6%. In 2019 the growth rates for new and older houses had stood at 7.7% and 6.9% respectively.
Regardless of the course of prices to date, most experts predict pressure over the next few months, as the recovery of the economy and household incomes from the current recession will not be as rapid as originally anticipated, especially given the second lockdown.
Market professionals say that the impact of the 2020 recession may not yet be reflected in the asking prices, but this is bound to happen sooner or later. As long as foreign buyers are absent, pressure on prices will increase, as it was purchases from abroad that drove the market higher in previous years.