Rising disposabe income may boost debt appetite but early days yet
Disposable income levels among households in Greece rose by one billion euros between April to June, advancing for the second quarter in a row, in a rise not seen in the country for more than seven years, according to data released on Monday.
The change reflects an improving job market and income levels that could boost the perception among households regarding their ability to take on more debt, such as a new mortgage, say economists, who warn, however, that it is still early before this will lead to a spike in domestic demand for real estate.
The figures from the Hellenic Statistical Authority show that disposable income in the second quarter of the year rose by 3.3 percent, or one billion euros, after a rise of 2.1 percent in the first quarter of the year. It is the first time that this figure has increased for two consecutive quarters at an increasing rate since 2010.
"Up until now we had seen a rise in employment without any gains in income, whereas this appears to be changing and that we have a stabilisation in wages. In order for the higher disposable income levels to translate into higher demand for property, this increase needs to continue for one to two years," said one economist.
Economic conditions have been improving in Greece though the austerity rolled out as a means of clinching rescue funding to prevent the country from going bankrupt continue to weigh on the rebound. Unlike other European countries that saw a sharp upturn in growth following their exit from their rescue program, Greece's recovery remains sluggish.
Banks are still seeing a rise in bad loans and property deals remains low despite propertys prices having plummeted more than 40 percent in the last eight years.