Fitch Ratings said that Greek real-estate prices are expected to decline 15% over the next two years as interest-rate increases make it harder for borrowers hit by austerity measures to keep up with mortgage payments, according to Bloomberg.
The proportion of loans not paid for more than three months rose to 2.7% in December from 0.9% a year earlier, they said.
“It seems likely that increased arrears will begin to result in increased defaults during the coming year,” Fitch analysts Aksel Etingu and Peter Dossett said in a report.
Greece’s house-price index has dropped by 4.3% since its 2008 peak, due to lower interest rates that have been helping homeowners make debt repayments.
Fitch expects the index to decline a further 15% over the next two years as the European interbank offered rate, or Euribor, drifts up, says Bloomberg.
Government efforts “to control and reduce public-sector debt are also expected to have a major effect on arrears levels,” the analysts wrote.
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!
