No End in Sight For Falling House Prices in Greece

Greek house prices continued to fall at an acceleratedprices than resale homes. The respective rates were
rate during the first two months of 2010. According to3.1% and 5.6%.
Greek members of the UK's Royal Institute ofThe annual RICS survey for the European housing
Chartered Surveyors (RICS), the average drop in pricemarket estimated that house prices in Greece fell by
has been approximately 10% year-on-year, with5%, placing the country roughly average for Europe.
variations relating to factors such as location, availabilityHowever, it should be observed that the correction of
of housing stock and developers' readiness tohouse prices in most markets began in 2008, which
negotiate.was not the case in Greece, where property values
All indications suggest that the Greek property markethad actually risen.
will be more downcast in 2010, than it was in 2009,Generally in Europe, different groups seem to be
when house prices fell by around 5%. The Greekforming. The first faction includes countries with
economic climate has clearly deteriorated,housing markets that are falling at an escalating pace,
unemployment is rising rapidly and banks continue withsuch as Germany, Ireland, France, Poland, the
stiff loan distribution policies. Such factors have almostNetherlands and the Baltic countries. In contrast,
frozen the demand for newly built homes, which arecountries such as Spain, Greece and Denmark the fall
the least affordable properties, since developers go toin house prices continues, but at a slower rate than in
great lengths to keep prices stable. This continuing2008. The second fraction where the housing market
attitude will increasingly lead to prospective buyerscrash has been short live and the first signs of
looking for resale homes that are 10-15 years old andrecovery are already visible regarding both price and
in good condition.sales, includes the UK, Norway, Sweden, while
Data from the Bank of Greece for 2009 illustrates thatSwitzerland and Austria experience no fall in house
newly built homes showed more resistance to fallingprices at all.