More than 10,000 properties are up for sale

More than 10,000 residential properties could be offered for sale at reasonable prices, which would help solve the country’s housing shortage, especially for middle-income families or young couples who, as the My Home program has shown, are in disadvantaged looking for housing at an affordable price.

We are talking about real estate available through the system electronic auctionswhich could have been immediately put up for sale if the system for disposing of these properties had not been “stuck” in bureaucratic procedures and litigation, such as dozens of appeals filed after the property was awarded to the interested party, or virtual leases by debtors who lost their property, with the obvious purpose of delaying the transfer of real estate to the new owner.

As sources close to the process explain, in many cases the lease is for several years with very little rent and an advance payment for it. And given that, due to delays at the mortgage bureaus, the time it takes for an owner to obtain a deed of transfer for a property is up to one year, as a result, such leases become binding on the new owner.

Added to these problems is the bureaucracy of the public administration associated with the need to legalize and regulate unauthorized property acquired by funds as a result of liquidation, and thus bring it to the market. According to Greek media, by the end of the year, 10,000 real estate properties will be taken over by investment funds through auctions, but the legalization and streamlining of arbitrary properties in order to bring them to the market is a long and complex process with an uncertain outcome.

By the end of the year, 10,000 real estate properties will be transferred to the funds, but it will take up to 4 years to bring them to the market

As a result, on the one hand, for a private person resorting to an auction in search of housing, there is uncertainty, since he does not know exactly when he will be able to become the owner of the purchased property. On the other hand, even objects purchased by funds are put on the market 3-4 years after acquisition. This situation contradicts initial fears that funds invested in the red loan market would flood the real estate market, causing prices to fall, and makes government inefficiency part of the problem of uncontrolled price increases.

Chaos in the technical housing inventory bureau

The picture reported by companies undertaking to legalize real estate on behalf of funds that bought “red” loans confirms that the transfer of real estate is taking place in BTI with huge problems. As they explain, in order for the transfer to take place, it is necessary to check the existing condition of the property in relation to its legal planning status, in accordance with the plans in the physical planning permission files of the local building authorities.

In different municipalities, the situation with documents in construction services is different. There are those that employ one employee, and the archive operates 1-2 times a week, as a result of which applications are reviewed after 2-3 months. If the applicant receives a response from the BTI, this does not mean that the case is under consideration, since it is possible that the permission file was lost. In such cases, it must be restored by the construction service, but the torment does not end there, since in very few instances you can only get by with an inspection of your property, since in most cases the consent of the co-owners of the apartment building is required (!).

1 billion frozen at real estate auctions due to… bureaucracy and chaos

A typical case is the acquisition through auction of an apartment in Ano Petralona, ​​located in an apartment building built in 1985 and consisting of 20 apartments. As a source close to the process explains, “After a 3-month search for the building permit file in the building department, you receive a certificate of loss of the file. Together with your engineer, you inspect the apartment, draw up a plan (if none of the co-owners protest) and submit an application to the building department for partial restoration of the file permissions.

The Department of Buildings returns your application requesting that you inspect the entire residence and provide complete plans. That is, he asks to provide plans for all 20 apartments. You are trying to find the manager of an apartment building and organize a general meeting to decide on a joint reconstruction of the entire apartment building. This means that the co-owners must pay for any necessary studies that must be carried out by an engineer. Eventually We tend to stay put and cannot start work, which means the property cannot be transferred.”

And archaeologists…

The problems do not end here, since even when a file is received, in most cases, these properties are subject to small or large arbitrary acts. The resettlement of random properties requires permission from the local Ephorate of Antiquities (Efa) or the Modern Monuments Service (YNMN) in all major urban centers such as Athens, Piraeus, Thessaloniki, Patras, Heraklion, Chania, etc., as well as on large parts of the islands , such as Mykonos (whole island covered), Hydra (whole island), Spetses (whole island), Rhodes, Corfu, Chios, Syros, Paros, etc.

The local archaeological commission meets 1-2 times a year, and as a result, most arbitrary cases take at least a year to resolve. This even applies to apartments on the floor of an existing building, since the apartment has a share of land.

9,275 sales worth 1.1 billion in 2023

The auction system can act as an effective asset disposal mechanism, promoting the balance between supply and demand for housing in our country, which has become a dominant issue for thousands of households. This is evidenced by e-auction data, based on which 9,275 real estate sales with a total value of €1.1 billion were carried out in 2023, despite the fact that 2023 was a difficult year, with events that hampered the holding of auctions, such as three elections and the abstention of notaries .

Residential properties are mainly sold in the major urban centers of Athens and Thessaloniki, and, according to an analysis of data from specialized real estate auction site Landea.gr, a large percentage of properties put up for auction are bought very close to the first offer price.

If we talk about residential real estate in Attica, then 75% of it was purchased either at the original price of the first offer, or with a minimal increase from it (up to 1%). Just as important, 90% of purchases are made for less than a 30% increase over the first bid price, and only 1 in 10 properties sell for more than a 30% increase over the original auction price. Let us remind you that from the beginning of 2022, the reduction in the price of the first offer is “automated”, without the need to obtain a court order. If the auction is unsuccessful, that is, the winner is not identified twice, the price of the first offer is reduced to 80% of the original price. If the auction is unsuccessful again, then the price of the first bid is reduced again, to 65% of the original. In 2023, almost a fifth of auctions placed had a reduced price (either 80% or 65%). The growth of the auction market continued in January 2024, when the number of transactions for the transfer of apartments increased by 51% compared to January 2023, and the average purchase price per square meter increased by 12.4%.

As more and more stakeholders use e-auction to find properties, speeding up auction appeals filed after a property has been awarded is essential to making it more effective. Although most objections are filed with purpose and are effectively overruled, the delay in their resolution creates significant uncertainty for the potential buyer.

PS Selling real estate to investment companies does not at all mean that the property will subsequently end up on the market – either for sale or for rent. Most often, such properties pass into the hands of short-term rental companies…

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