Cash is king when looking for a house
More than 40,000 residential properties were sold in Greece last year, according to estimates by real estate associations. In particular, three-quarters of these transactions were carried out exclusively in cash – without the intervention of a credit institution.
Kyriakos Kampouris, founder and managing director of Individual Mortgage Solutions, said at the recent Premium Real Estate Forum in Athens that only 25% of real estate transactions are made with the provision of bank credit. His company cooperates with the four systemic banks, as it offers its customers advice on mortgage loans.
Given that the Bank of Greece’s latest credit stability report cited the issuance of 10,685 home loans in 2021, it follows that more than 40,000 homes changed hands in Greece last year. . This is a particularly satisfying figure, considering the significant impact of the pandemic for much of the year.
On the other hand, it is becoming clear that the real estate market has not yet returned to normal, at least the kind of normality seen in the period leading up to the financial crisis of the 2010s. The situation then was the opposite of what it is today since more than 80% of residential real estate transactions were made by bank credit and less than 20% took place without the intervention of a credit institution.
Since the beginning of the previous decade, with the effective exit of banks from mortgage lending, cash has become king in residential transactions, a trend that seems to continue even if house prices are not low and banks are not avoid getting involved in mortgage lending.
Nevertheless, it is clear that the stricter criteria for loan origination had a negative impact on the increase in the volume of transactions and new origination of mortgage loans. Lefteris Potamianos, the head of the Athens-Attica Realtors Association, told the same forum that “if bank credit was available to them, more households would have started the process of buying a house”, adding that several customers started looking to buy a property but ended up renting one instead.