Greek Residential Properties Report Fall In Prices
News Posted On: 11 June 2014
Despite over six years of steady downfall, property prices in Greece continue to decline at a steady pace. Without much positive outcome to look forward to, the property market in Greece remains weak with fewer demands made in property acquisitions, while activity in the construction industry shows repeated signs of struggle.
All over Greece, property rates have plummeted from earlier lows. The Bank of Greece reported Athens, the country’s capital, see a staggering drop of about 10.87 percent in 2013. While quarterly based house prices showed a consistent drop on an average of 4 percent throughout the fourth quarter in 2013.
Fitch predicts further drop in housing market prices
International ratings firm Fitch has projected an additional 15 percent drop by mid-term quarter in 2014. This addition has now seen Greek property markets drop to a total of 45 percent since the recession hit Europe in 2008. Central bank data has shown that house prices have dropped by around 34 percent since the initial stages of recession.
Fitch has reported this constant negative decline in Greek property market, in addition the continual economic recession as well as ambivalence in the real-estate market to stem from the country’s tax framework. A mere number of house transactions were liable to completion, more so due to the skepticism over applications granted by the country’s capital gains tax.
Even though this governing issue has been effectively taken care of by the government, several transactions are yet to see a jump back to their regular occurrence and frequency. Despite the number of agreements made during the so called transaction freeze period, house transaction rates continue to be almost negligibly slow. The issue lies between buyers and government objective tax requirements which demand projections of escalated market rates on paper, which work out to be far greater than the actual real-estate market rate.
Property market weighed down by uncertainty
In order to revive their dying real-estate market, the government in Greece has sought to entice foreign investors looking to purchase or rent property in amounts of €250,000 euro and upwards with residence grants within the country. This stipulation allows for a five year renewable residence stay, and follows similar measures taken by countries like Spain, Hungary and Portugal.
Investing in the Greek real-estate market now depends on your stance in concern with opposition to risk. Some investors would see making deals in Greece shaky with too many uncertainties on board. However, real-estate projections for the future do show a positive turn-around. This fiscal year shows Greek government projections to be on an upward climb.
Even though Fitch ratings have shown a projected decline, it has been a slow deceleration. The Bank of Greece's report for the real-estate market in the future has shown a positive outcome, stating that the property market in Greece is set to recover, when their economy shows positive signs of recovery. This might be a risky prospect for most investors, however if the situation does begin to show signs of improvement with an increase in property prices, then it would be an ideal time to jump back in and invest.
Written by Les Calvert
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