Crete property news and local information - West Crete Journal™

Realty recovery to take time

Current conditions in the economy are not conducive to a recovery in the domestic real estate market before the second half of 2010, the third International Real Estate Congress in Thessaloniki heard earlier this month. Speakers argued that the lack of liquidity, a large stock of unsold new houses and a greater supply of used apartments are the factors holding back new construction.

Unlike other developed property markets, an increase in supply in Greece did not cause prices to slide, said speakers at the congress. Prices in the USA have fallen more than 25 percent since the beginning of the current economic downturn and in the UK about 15 percent. In contrast, the respective figure in Greece is about 2 percent, while increases of up to 8 percent have been recorded in some areas. This is largely explained by the fact that the Greek market has a much lower degree of dependence on mortgages as compared to other countries. Speakers pointed out that the total value of mortgage loans represents just 12 percent of the country’s housing stock, against more than 80 percent in the USA.

According to the latest official figures, housing investment in the second quarter of 2009 was down 23 percent year-on-year. Developers’ representatives said the trend will not see any reversal anytime soon, noting that many construction firms have suspended projects. The number of new houses that will come onto the market in 2010 may even be less than 60,000.

- Athens Plus, 25 September 2009

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