The results from home auctions conducted by banks due to unpaid debts have produced some meager revenues but are proving effective elsewhere: in cornering strategic defaulters.
In the latest auctions held by lenders on Wednesday, 261 properties went up for sale due to unpaid debts, according to data provided by notaries. Out of this amount, 76 were sold and 135 were passed in. Another 50 were withdrawn from the process just before the sale began as the owners managed to find the money owed and paid the bank.
"The results are not good but I don't think anyone was expecting much more. Auctioning off thousands of homes in a depressed market was never going to provide any type of real solution," said an official from a leading real estate company.
Strategic defaulters have been the nightmare of Greek bankers for some time now. Some estimates place the number of loan holders who can pay but refuse to do so at 25% of total non performing loans.
The pace of foreclosures on real estate in Greece is set to pick up rapidly despite the broader residential market remaining in the doldrums. Apart from foreign investors looking for a beachside bargain in Greece, activity is limited to some pockets of commercial real estate and the tourism sector.
In the meanwhile, eurozone countries and the International Monetary Fund, the two creditors that have been providing Greece with rescue money since 2010, are demanding that foreclosures pick up. The latest target foresees that 130,000 properties are auctioned off by 2021.
This week's sales come after Piraeus Bank, the country's largest lender, completed last year three rounds of property auctions on its own online platform. About one in two were passed in and the bank is planning another round of auctions later this month.
There are many, however, many concerned in Greece about the lack of transparency offered in this process.
After each auction, Piraeus Bank announces the number of properties sold but not the price of the deals, raising suspicions about how aggressively the lender might be managing these assets. Another worry is what will lenders, like Piraeus Bank, do with the properties that have not been sold and when will they ultimately hit the market.
"I would love to know what kind of deals Piraeus Bank is doing in these auctions," said one valuations expert, who works closely with Greek banks.
"This sort of information would help clear the air on a number of issues and provide investors with valuable data - information that exists in other countries."