Questions about the speed of recovery in the housing market are currently raised by two key parameters, the stock of unsold real estate and the imminent intensification of auctions, executed exclusively in electronic form. According to a relevant analysis, the existing stock of unsold real estate now exceeds 250,000.
At the same time, it is noted that the real fall in prices in certain areas and property categories is much higher than the average reflected in the Bank of Greece indices. In particular, it is estimated to be between 60% and 70%, especially in the case of older homes of 30-40 years or more in the center of Athens. “Apartments made three and four decades ago in the center of Athens are sold today instead of 10,000 to 20,000 euros,” it said.
On the other hand, short-term leases and the residence permit scheme (“golden visa”) to residents of non-EU countries, which will acquire real estate worth at least 250,000 euros in Greece, have restored mobility in the housing market. As the report says, enough foreign funds are looking for real estate in the heart of the Greek capital, aiming at exploiting them through the short-term leases sector. The result is that it is now difficult to find a rented apartment in some parts of the center, without even avoiding distortions, as high rents are recorded in low-quality apartments.
Now, in addition to excess supply, auctioning will play a key role in the faster recovery of prices and demand in the housing market as they will create a parallel property market from which any interested buyer can identify investment opportunities at prices, as a rule, lower other real estate in the same area. Therefore, it is crucial to manage the volume of real estate to be auctioned so as not to put severe pressure on new housing price reductions.
Meanwhile, the image of the real estate industry is also clearly positive. In its latest report, the Bank of Greece noted that the gradual absorption of the limited available stock is expected to boost the development of new real estate in targeted sectors as well as the upgrading of older and subordinate inventory characteristics. “However, a condition for a sustainable recovery of the real estate market is, in addition to maintaining the growth prospects of the economy, restoring the flow of financing from the banking system,” the report said.