Greece: 83,000 houses up for auction

Banks are auctioning off 83,000 properties owned by Greeks, with painful consequences for Greek society.

At a time when most citizens are barely making ends meet and many are losing their homes, paradoxically, real estate prices are rising. This means that the property put up for auction is concentrated in the hands of a few, and then part of it becomes the property of foreigners who come to Greece to buy a house.

Significantly, as mentioned in Alfa-Bank’s recent analysis, despite the negative impact of the pandemic on domestic economic activity, the residential real estate market has demonstrated resilience, with prices remaining on an upward trajectory, and their annual growth rates again accelerated from the first quarter of 2021 to this time.

Between 2018 and 2021, house prices rose, cumulatively, by about by 20% partially offsetting losses from a long decline in 2009-2017 in minus 40%.

The rapid rise in residential property prices over the past two years (2020: 4.5%, 2021: 7.4%) has been coupled with a significant increase in housing investment (2020: 14.6%, 2021: 26.5%) and private construction activities (2020: 5.9%, 2021: 45.9%), in terms of volume (m3).

“The recovery of the Greek property market continued during the first quarter of this year. According to the latest available data from the Bank of Greece, the residential real estate market remains strong, with the apartment price index recording a significant year-on-year increase in the first quarter of the year (8.6%), – noted in the analysis of the bank. – The positive outlook for the property market is also reflected in the strong growth in residential real estate investment in the first quarter of 2022, which increased by 18.6% year on year, as well as in the increase in private construction volumes by 13.8% per annum.

In a society where the population does not have enough income for a normal life, property prices continue to rise. Paradox? Nothing of the kind, this is a continuation of the policy of creditors to redistribute the property of the population from the poor to the rich. Or do you think that the 645 billion euros that Greece owes (including about 200 billion in private loans) with 200 billion of GDP is just that …

What’s next: The banks will announce the names of investors who will take over the management of more than 83,000 properties, either privately owned or, most of them, collateralized by red loans.

The first concerns the €5.2bn Ariadni megaproject, which PQH has put up for sale. Although the tender has been extended again in terms of submission of binding bids, with a new and final deadline set for next Friday, the interested parties are already in position to battle, with high competition based on the size of their portfolio.

Recall that Ariadni’s loans are collateralized by 83,000 real estate objects, the value of which is 7.4 billion euros. Of these, the majority, i.e. 44,000 in the amount of 3.7 billion euros, falls on residential real estate. As is known, the company issued 97,000 loans corresponding to 72,000 loan agreements, which were provided to 53,000 borrowers.

Of the €5.2 billion in book value of loans, €2.1 billion is corporate debt, €1.2 billion is SME debt, €1.5 billion is home loans and €400 million is consumer loans.

At this point, it is certain that even at this stage of the process, after the optional, the mega-consortium of Bain, Fortress, Davidson Kempner, doValue and Cepal will be “present”, yet to be unveiled…surprise from Ellington (She is reportedly in talks with Intrumwho did not participate in the first round).

The second relates to Alfa Bank’s Skyline project with 573 own and reclaimed properties worth about 500 million euros. On this basis, real estate (including those owned by Alpha Urban Properties) will be transferred to a non-listed company, which will form the basis of a joint venture between the investor and Alfa-Bank.

There are many interested parties – Invel-Prodea, Dimand-HIG-Premia and Brook Lane-Bain – and the bank is reportedly looking to announce the name of a preferred investor within the next few days.

With the deal in question, Alfa-Bank claims a strong position in the real estate market, the rate of which remains upward, despite events occurring from time to time.

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