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Greek property prices fall further in Q1 despite easing recession
May 20, 2014 / 1:12 PM / 4 years ago

Greek property prices fall further in Q1 despite easing recession

ATHENS, May 20 (Reuters) - Greek property prices continued
to fall in the first quarter, even though economic recession
eased, as squeezed household incomes, record high unemployment
and tax increases still took a toll, data showed on Tuesday.
    Property accounts for a large chunk of household wealth as
Greece has one of the highest home ownership rates in western
Europe - 80 percent versus a European Union average of 70
percent - according to European Mortgage Federation data.
    Bank of Greece data showed that apartment prices fell 7.5
percent in the first three months of 2014 from a year earlier,
after an 8.6 percent decline in the previous quarter.
    Higher property taxes to help plug budget deficits, coupled
with tight credit from capital-strapped banks and a jobless rate
hovering near 27 percent have pressured the market as Athens
struggles to emerge from a crippling debt crisis.
    Based on the central bank data, apartment prices have
plunged 34.7 percent from a peak in 2008, when the country's
recession began.
    The property market could start to see some relief if the
economy pulls out of a six-year recession this year.
    Greece's economy shrank by 1.1 percent in the first quarter
from a year earlier, the slowest pace of contraction in four
years. The government and its international lenders project a
mild expansion of 0.6 percent for the full year. 
    Annual property price declines have accelerated since 2010
when the country's debt crisis exploded. Prices fell 4.7 percent
in 2010, 5.5 percent in 2011 and 11.7 percent in 2012.
    The Bank of Greece provided the following data:
                            GREEK APARTMENT PRICE INDICES 
                            2012  2013*  Q1* 2014
Index                       78.0  69.9   66.7
Change (y/y %)             -11.7 -10.3   -7.5
New (up to 5 years)         80.1  71.8   68.7
Change (%)                 -12.1 -10.4   -7.6
Old (older than 5 years)    76.6  68.7   65.4
Change (%)                 -11.4 -10.2   -7.5
* provisional data
  source: Bank of Greece

 (Reporting by George Georgiopoulos; Editing by Susan Fenton)

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