According to the Bank of Greece’s Monetary Policy report published on Tuesday, since the beginning of the financial crisis five years ago, in 2008, the house prices in Greece have fallen by 37.6 percent in real terms. The report also mentions that real estate agencies have reported an even greater drop in prices.
The cities where the biggest drop of house prices have been recorded are Athens and Thessaloniki. Large properties in the most expensive areas of these cities are being affected the most.
The report comments that the Greek property market is being characterized by excessive supply and a significant decline in demand. This can be attributed to the continuing increase of unemployment, the decrease of households’ disposable income, high property taxes and the instability of the tax framework. Other important factors in the shrinking demand for houses are the strict terms under which the banks issue loans and the lack of cash flow.
The Greek government in order to revive the weak housing market, has recently offered residence to foreign investors who are purchasing or renting property of over 250,000 euros. The government’s plan, which is similar to measures adopted by Hungary, Spain and Portugal, is valid for five years and open to renewal.
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