The Greek property downturn deepened even further during the first three months of 2017.
Uncertainty over the country’s bailout programme, along with chronic weakness in its banking sector, have been cited as the main reasons for the spiralling downturn.
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Data released by the Bank of Greece has shown that apartment prices fell by 1.8% during the first quarter compared to the same period in 2016. This brings the total fall since 2008, when the country’s protracted recession began, to a whopping 41.8%.
The property market as a whole has been hit by taxes imposed in order to plug budget deficits, a tight credit market and a jobless rate that is hovering around 23% – the highest in the 19-nation euro zone.
National Bank economist Nikos Magginas commented
“Uncertainty related to the completion of a bailout review that prevailed in the first quarter, and continued deleveraging by banks, [has] weighed on the property market.”
Greece actually has one of the highest homeownership rates in Europe, meaning that property accounts for a big chunk of household wealth across the nation. According to the European Mortgage Federation, around 80% of Greek nationals own their own home, which is 10% higher than the European Union average of 70%.
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In addition to their negative effect on household wealth, falling property prices also affect collateral values on outstanding mortgages. The slide has gradually eased from 10.8% in 2013 to 2.4% last year.
The European Commission had predicted that the economy in Greece will rebound by 2.1% this year.
