ECONOMY

Property prices dip in downturn

The cost of buying an apartment in Greece fell by an annual pace of 4.6 percent in the last quarter of 2009 with developers managing to avoid sharp price cuts despite the downturn, according to data made public yesterday. The Bank of Greece, the country’s central bank, said the price of newly built apartments up to five years old dipped by 3.1 percent, while the price tag on those that are older fell by 5.6 percent. «The slightly larger price drop on older apartments seems to reflect the greater resilience seen in newly constructed housing, which is generally offered by construction companies,» it said in a statement. Price drops were steepest in Thessaloniki, falling 7.2 percent year-on-year, while the correction in Athens reached 5.1 percent. Greece’s economy entered a recession in 2009 that proved harsher than initially thought, shrinking by an annual pace of 2 percent. The downturn has prompted a deceleration in mortgages issued to home buyers as banks fear that consumers will not be able to repay their loans. Industry sources estimated late last year that more than 200,000 apartments remained unsold in Athens due to the recession but developers have managed to keep prices from tumbling due to low levels of leveraging. Central bank data showed that the number of residential property transactions completed in the last three months of the year dipped 2.5 percent to 20,500 from the same period a year earlier.