Greek Banks Hold 10,000 Properties Worth €7 Billion

Greece's Housing Market: A Mountain of Foreclosed Properties

The Greek housing market is grappling with a significant challenge: a vast stockpile of foreclosed properties.

How Will This Impact Market Prices?

Banks and servicers currently hold approximately 10,000 properties acquired through foreclosure auctions. These properties, valued at around €7 billion, could potentially regulate the market if they were put up for sale.

These properties could stabilise against rising prices in the housing market, especially for residential properties. When listed for sale, they will inevitably create downward pressure on prices, solving the persistent housing problem, particularly in Athens.

Relevant stakeholders emphasize that the issue has become a significant social problem, and solutions must be sought at all levels.

Regulatory Hurdles:

However, due to various regulatory hurdles, banks and servicers cannot quickly release these properties onto the market. Many of these properties require legal and administrative procedures, such as property registration and regularization, which can significantly delay their sale.

The issue of exempting banks from these procedures for specific properties has been discussed but has not yet been approved. It's worth noting that properties purchased through foreclosure auctions typically do not require these procedures.

The entire process of preparing a bank-owned property for sale can be lengthy and complex, limiting banks' ability to significantly increase their supply and putting downward pressure on property prices.

Diverging Trends:

Greece's trend is completely different from that of other European countries, including Cyprus. These countries are experiencing significant construction growth and have a large supply of new properties.

Another important factor in the Greek market is that many buildings, especially in central Athens, are old and require renovations and legal procedures before being sold. As a result, many of these properties are not readily available for sale.

Credit Expansion:

The "My House 2" program is expected to help expand credit availability for mortgage loans. However, in the current phase, with the program's implementation still pending, demand for mortgage loans has stalled.

This program will increase demand for properties. However, as it only applies to specific properties, it is not expected to significantly impact prices, according to some sources, while others express more scepticism.

The Prime Minister's Chief Economic Advisor, Alexis Patelis, cited a study stating that the program does not significantly impact property prices.

Want to Invest in Greece’s Golden Visa Program: New Investment Requirements Announced