Greek Apartment Prices Fall by 4.5% Year-On-Year
30 August 2011
According to the Greek Central bank, the continued recession saw residential apartment prices fall a further 4.5% year-on-year during the second quarter of 2011. This follows the decline of 5.2% in the first quarter, 4.7% in 2010 and 3.7% in 2009.
The data shows older apartments (over 5 years) were hit hardest, with prices down 5.5% during the second quarter, compared to a 3% decline in the prices of new apartments. This follows a 5% decline in the prices of older apartments in 2010.
On a regional basis, Athens saw the biggest decline, with prices down 6.7% on the year in Q2, compared to the best region, which was Thessaloniki with a 4.7% drop. The data also shows a 39.1% drop in residential property transactions during the year ending Q2, which is fuelling the price decline.
The Greek economy has been in recession since 2009, and the economy has contracted by more than 4.5% this year, which is greater than had been forecast.
Greece is now suffering for years of cheap and easy credit. According to the European Mortgage Federation 80.1% of Greeks own their homes, compared to the EU average of 70.4%. Easy credit and owner aspirations led to strong price growth in the years following Greece’s accession into the EU, including growth of 10.9% in 2005, 12.6% in 2006, 4.6% in 2007, falling to 1.7% in 2008 as the global crisis began to unfold.