Housing investment to continue to fall

Investment in housing will continue to fall next year, with a slight rebound not expected until the second half of the year, according to Alpha Bank. The bank said in an economic report released yesterday that investment in residential properties is seen as falling to 5.5 billion euros next year, from 6.3 billion in 2010 and 14.6 billion in 2007. ‘A stabilization in the sector and a small rebound is expected in the second half of 2011,’ Alpha said. The bank added that rising lending costs for Greek banks locked out of the interbank lending market due to the sovereign debt crisis have contributed to slowing loan growth in the economy, along with a dip in consumer demand. Real estate prices are expected to continue on a downward trend in the medium term if spreads on Greek government bonds remain above 400 basis points, it added.

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