Forced home auctions pose fresh risk to stability
The large number of homes being auctioned off by Greek banks due to upaid debts poses a risk to the stability of real estate prices, said the Bank of Greece, the country's central bank, on Monday.
In a governor's report, the bank said that residential prices are seen stabilising this year after having slumped by 42 percent since 2008 but fresh risks are emerging.
"The rate of prices stabilising could be affected by the large scale sale of homes being sold (by banks) to private investment funds and the faster rate of auctions," said the report.
Greek banks have been under growing pressure from European banking regulators to reduce bad loans left on their balance sheets by the country's eight year economic crisis. The amount of non performing loans held by Greek lenders has fallen to 95 billion euros in December, from 100 billion euros in September, but more work needs to be done to help banks get back on their feet and resume lending to economy.
The latest goal set by Greece's lenders - eurozone nations and the International Monetray Fund - foresees 130,000 homes being auctioned by 2021.
Banks have been rapidly putting properties under the hammer but results have so far been mixed. Greece's largest lender, Piraeus Bank, has sold about one in two properties in the last few property auctions it has held.