ATHENS (Reuters) - A protracted downturn in Greece’s residential property market slowed sharply in the first quarter of 2018, central bank data showed on Tuesday, raising hopes that prices were starting to respond to a recovering economy.
Property accounts for a large chunk of household wealth in Greece, which has one of the highest home ownership rates in Europe - 80 percent versus a European Union average of 70 percent, according to the European Mortgage Federation.
Apartment prices fell by 0.2 percent in the first three months of 2018 from a year earlier, Bank of Greece data showed, decelerating from a 1.9 percent decline in last year’s first quarter.
In all of 2017, prices slid 1.0 percent from a year earlier, the data showed. That took the cumulative fall since 2008, when the country’s protracted recession began, to 42 percent.
The market has been hit by property taxes imposed to plug budget deficits, a tight credit market and a jobless rate still hovering above 20 percent - the highest in the 19-nation euro zone.
Apart from undercutting household wealth, falling property prices also affect collateral values on banks’ outstanding real estate loans.
The price slide has gradually eased from 10.8 percent in 2013 to 2.4 percent in 2016 and 1.0 percent last year, with economists expecting prices to level out soon.
“The data confirm the stabilization trend in the property market,” said National Bank economist Nikos Magginas. “We expect the trend to continue with a pick-up in growth helping to drive prices to positive terrain in the coming quarters.”
Greece’s economic prospects improved after it signed up to a third bailout package worth up to 86 billion euros ($107.3 billion) three years ago.
Its 180-billion-euro economy expanded for a fifth straight quarter through March this year and at a faster pace than in the previous quarter, helped by stronger exports.
Reporting by George Georgiopoulos; Editing by Andrew Heavens