Real estate market stagnation to be further affected by foreclosures and home auctions

Huge questions are raised as to the consequences that new measures concerning non-performing loans (NPLs) or so-called “red loans” will have on Greece’s real estate market that has been in a slump for the last seven years with over 250,000 vacant properties for sale. Real estate professionals still don’t know how much lower prices will fall as a result of foreclosures and auctions.

From the start of 2009 until today property prices have dropped by 42%, with a downward trend continuing. Real estate agents are finding a number of property owners seeking to sell their property because they need to pay off their debts, however interest has wained by 25-30% compared to pre-crisis levels.

“Demand on the property market at this point is zero with very few sales that are around 100,000 euros or 150,000 euros at the maximum, especially for bargain buys with cash as bank loans are no longer given,” says Dimitris Biniaris, head of the Federation of Real Estate Contractors of Greece (OMASE). “The matter of red loans is something that has been around for a while, that is why everyone is in a state of pause.”

The local real estate market has been in crisis for the last few years. OMASE has 10,300 legal real estate agents around Greece and considers it important for the correct evaluations of property to be made in cases of those who have mortgages.

Until now, the major problem of the real estate market has been the huge difference between real estate objective values and commercial values that had gaps as much as 30%, but now the problem is stagnation.