House prices continue falling in Greece, though at a slower pace than the sharp drops of 2012 and 2013. Prices are not expected to begin rising before the end of next year.
Based on figures from the Bank of Greece, house prices in urban areas dropped 5.47% (4.91% in real terms) month over month in 2015, the lowest annual fall since 2009, with just a 1% (-1.5% in real terms) QOQ in Q4 2015.
In Athens, apartment prices fell by 4.9% (-4.34% in real terms) during 2015, compared with annual declines of 6.8% in 2014, 11.45% in 2013, 12.91% in 2012, and 8% in 2011. Compared to the previous quarter, house prices in Athens fell by 0.44 % (-0.94% in real terms) in Q4 2015.
Thessaloniki, the country’s second largest city, saw house prices fall by 5.9% (-5.4% in real terms) in 2015, the lowest annual decline since 2008. House prices fell 1.3% (-1.7% in real terms) QOQ in Q4 2015.
Overall, residential property prices have dropped 42% (-45.3% in real terms) from their peak in 2008. Despite the slight improvement, any recovery is expected to take years to accomplish.
“The downward trends in house prices are expected to continue in the upcoming period,” said the central bank. “The housing market is expected to recover with a relative time lag, largely depending on the increase in households’ disposable income, a rise in employment, as well as an improvement in bank financing conditions.”
In an effort to revive the housing market, the Greek government recently offered a residence plan similar to those of Hungary, Spain, and Portugal. Under the plan, non-EU investors purchasing or renting property worth over 250,000 euros can gain legal residence for five years. The plan is also open to renewal. Real estate transfer tax was also reduced from 10% to 3%.