November 15, 2013 / 11:42 AM / 6 years ago

Greek property prices continue slide in Q3, economic slump hurts demand

ATHENS, Nov 15 (Reuters) - Greek property prices continued
to fall sharply in the third quarter even as economic recession
eased slightly, central bank data showed on Friday, with
squeezed household incomes, record high unemployment and tax
increases taking a toll.    
    Property accounts for a large chunk of household wealth as
Greece has one of the highest home ownership rates in western
Europe - 80 percent versus a European Union average of 70
percent - according to European Mortgage Federation data.
    Higher property taxes to help plug budget deficits, coupled 
with tight credit from capital-strapped banks and a jobless rate
above 27 percent have pressured the real estate market as Greece
struggles to emerge from a severe debt crisis.
    The Greek economy shrank by 3 percent in the third quarter
from a year earlier, its smallest contraction in nearly three
years as a rebound in tourism helped, but the residential
property market remained depressed.
    Bank of Greece data showed that apartment prices fell 9.6
percent in the third quarter from a year earlier.
    The property market could start to see some relief if the
economy returns to growth next year. The government forecasts
0.6 percent economic growth in 2014.   
    Based on the central bank data, apartment prices have
plunged 31.6 percent since their peak in 2008, when the
country's six-year recession began.
    The annual price declines have accelerated since 2010 when
the country's debt crisis exploded. Prices fell 4.7 percent in
2010, 5.5 percent in 2011 and 11.7 percent in 2012.
    The Bank of Greece provided the following data:
**********************************************************
                            GREEK APARTMENT PRICE INDICES 
                            2010    2011  2012*  Q3* 2013
Index                       93.3    88.2  77.9   69.6
Change (y/y %)              -4.7    -5.5 -11.7   -9.2
New (up to 5 years)         96.0    91.2  80.1   70.7
Change (%)                  -4.2    -5.0 -12.1  -10.4
Old (older than 5 years)    91.7    86.4  76.5   68.9
Change (%)                  -5.0    -5.8 -11.4   -8.4
-----------------------------------------------------
  * provisional data 
  source: Bank of Greece

 (Reporting by George Georgiopoulos; Editing by Susan Fenton)
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