September 2, 2019 / 11:16 AM / 14 days ago

Greek housing sector rebounds at strongest clip in more than 12 years

    * Residential property prices rise 7.7% y/y in Q2
    * Home prices had plunged 42% since 2008 peak
    * Prices in Athens outperform, up 11.1% y/y

    By George Georgiopoulos
    ATHENS, Sept 2 (Reuters) - The recovery in Greece's housing
market gained speed in the second quarter with prices increasing
at the strongest pace in more than 12 years, helped by an
expanding economy and growing foreign interest, central bank
data showed on Monday.
    Property accounts for a large chunk of household wealth in
Greece, where the home ownership rate is 80%, above the EU
average of 70%.
    Apartment prices rose 7.7% in the second quarter compared
with the same period a year earlier, Bank of Greece data showed,
accelerating from a 1.3% increase in the first quarter of 2018.
    More specifically, prices rose by 11.1% year-on-year in
Athens, where home-sharing platforms such as Airbnb and a
"golden visa" programme - a renewable five-year resident's
permit in return for a 250,000-euro ($285,000) investment in
real estate - have grown very popular.             
    Greek house prices fell 42% between 2008, when the country's
protracted recession began, and the end of 2017.
    A similar trend is unfolding in Greek prime office prices,
which rebounded 7.0% last year.             
    "Housing prices rose 3.5% quarter-on-quarter, a seventh
consecutive quarter of growth. Year-on-year it was the strongest
pace in 12 and a half years," said National Bank economist Nikos
Magginas.
    The uptrend was seen in all market segments - including old
and newly built apartments - and in all regions, though prices
in the capital led the way.
    "Increasing demand from residents and non-residents, buoyed
by positive macroeconomic trends and the first reduction in real
estate taxation in a decade, supports the uptrend," he said. 
    The Greek market had been hurt by property taxes imposed to
plug budget deficits, tight bank lending and a jobless rate
still around 17.2%, the highest in the 19-nation euro zone.
    But economic prospects have improved since 2015 when Greece
signed up to a third bailout package worth up to 86 billion
euros ($107 billion). The country emerged from its latest
bailout in August last year and is now relying on markets to
cover its financial needs.
    Greece's 180 billion euro economy expanded in
January-to-March, but at a slower annual pace than the quarter
before, mainly driven by consumer spending and a pick-up in
investments.             
    Following is a table on Greek apartment prices from Greece's
central bank:

****************************************************************
                         2013  2014  2015  2016  2017  2018  Q2
Index                    69.5  64.3  61.1  59.6  59.0  60.0*64.4
Change y/y %            -10.9  -7.5  -5.1  -2.4  -1.0   1.7* 7.7
New (up to 5 years)      71.4  66.8  63.0  61.2  60.7  61.9*66.3
Change %                -10.9  -6.5  -5.6  -3.0  -0.8   1.9* 7.7
Old (older than 5 years) 68.3  62.8  59.8  58.6  57.9  58.9*63.2
Change %                -10.8  -8.1  -4.7  -2.0  -1.2   1.6* 7.6
----------------------------------------------------------------
 * revised
 source: Bank of Greece

 (Reporting by George Georgiopoulos
Editing by Andrew Heavens)
  
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