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Athens - Greek residential property prices declined at a faster pace in the second quarter than the first, data showed on Tuesday, as Greece's slide back into recession hit household incomes and employment.
Property accounts for a large chunk of household wealth in Greece, which has one of the highest home ownership rates in Europe - 80% versus a European Union average of 70%, according to the European Mortgage Federation.
Bank of Greece data showed that apartment prices fell by 5.6% in the second quarter of 2015 from a year earlier. The annual pace of decline accelerated from 4.1% in the first three months of the year.
The pace of price declines had begun to ease after a 10.8% drop in 2013 up until the first quarter of 2015. Residential property prices have dropped by 40.5% from a peak hit in 2008, when the country's recession began.
The real estate market has been hit by property taxes which the government imposed to plug budget deficits, a tight credit market and a jobless rate hovering near 27%. Apart from their negative wealth effect, falling property prices also affect the collateral value on banks' outstanding real estate loans.
Greece's economy shrank by 0.2% in the first three months of the year compared with the last quarter of 2014, after emerging from a six-year recession last year. The European Commission projects Greece will fall back into recession in 2015, with gross domestic product contracting by 2% to 4%.
