Property prices seen sliding further but at a slower pace

Property prices in Greece will slide further in 2014, Alpha Bank has forecast in a study.

“The property market’s recovery is expected to be relatively delayed, as it mainly depends on a normalization of the taxation regime, but also on the restoration of confidence in the prospects of the economy’s recovery and growth, on a steady strengthening of household incomes and a significant rise in stable employment,” Alpha Bank’s analysts said in its weekly economic bulletin.

“Overall, the significant slowdown in the downward trend for apartment prices in the first half of 2014 also signals a slowdown in prices for the year as a whole, at around -6.3 percent. The prospects of apartment prices stabilizing are significantly strengthened from 2015, particularly if the forecast for real GDP growth of 2.9 percent proves correct,” the report continues.

Despite the steep drop in prices and the significant number of homes for sale – often at prices below the actual value – transactions continue to dwindle, as sellers have begun anticipating that the value of their property will not fall any further, while buyers appear to be expecting a further slide, according to the report.

The average waiting period before houses are sold was estimated at about a year in the first months of 2014, against around five months in 2009. The number of transactions carried out with the help of banks fell to 3,003 in the second quarter of 2014, from 4,008 in the first quarter and 5,121 in the second quarter of 2013.