Trade with Greece
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may, in certain cases, lead to increases of more
than 50%, or even 80%.
How long will the property mar-
ket crisis last?
Past surveys of the Department of Statistics of
the Athens University of Economics and Business
had already detected concerns about the future of
the domestic property market. The main question
that is now posed by all property market players
is how long will this crisis last. To begin with, the
global economic crisis is harming all sectors and,
of course, the property market. Second, the prob-
lems in the real estate market had cropped up
much earlier, owing to the excess supply of
newly-built properties and their relatively high
prices. Housing starts have taken a plunge, while
sales ―according to property market experts―
are down by 50%-70%, thus creating an excess
supply that, owing to the “defensive measures”
employed by construction companies, has not yet
led to a meaningful drop in property prices. The
conclusions drawn from the above facts are that:
•
The majority of experts (41.4%) believe that
the crisis will last from two to three years.
•
A large percentage (32.9%) of experts believes
that the crisis will last for two years.
•
An aggregate 91.4% of experts believe that the
crisis will last from one to three years.
This forecast of a crisis lasting up to three years,
which is embraced by 91.4% of experts, is not too
far from the estimate expressed in a relevant
study by the International Monetary Fund. More
specifically, the IMF’s study on the recessions
that hit 21 OECD countries since 1960, points out
―among others― that the average duration of
property price crises is four and a half years, with
the decrease in prices reaching 30%.
39.7% of respondents to the survey believe that
the course of the property market will remain
more or less unchanged in the next six-months.
There is a drop ―from 53.7% in the previous sur-
vey to 42.5% now― in the percentage of proper-
ty market experts who expect the housing market
to decline. Moreover, there was an increase
―from 5.3% in the previous survey to 8.2%― in
the number of respondents who expect an
improvement in the real estate market.
32.9% of the respondents believe that there is
excess supply in the housing market. This per-
centage has increased, as compared to the previ-
ous semi-annual survey. Moreover, 58.9% of the
respondents see excess supply, as compared to
66.3% in the previous survey.
There is a slight increase ―from 3.2% in the pre-
vious survey to 4.1%― in the percentage of
experts who believe that supply is in balance with
demand, while there is a small increase in the
percentage of respondents (from 2.1% in the first
half of 2010 to 4.1% in the first half of 2011) who
talk about excess supply in the housing market.
60% of market experts expect a “relative
decrease” in home prices during the next six-
months; this percentage is reduced, as compared
to that of the previous survey (75.8%). Moreover,
30.4% of experts expect “sale prices to remain
unchanged”; this percentage is much larger than
that of the previous survey (8.4%). Finally, the
percentage of experts that predict reduced
demand for homes stands at 44.4%, less than
that of the previous survey (50.0%).
