The Greek property paradox

The share of cash in real estate purchases is increasing, as the relevant data show. The sharp increase in lending rates has sharply reduced the demand for mortgages, but at the same time transactions continue to move upward, along with sales prices, which are breaking one record after another.

According to Bank of Greece data, the flow of financing in housing credit decreased by 646 million euros in the first half of the year compared to last year, while in June the negative flow of financing reached €38 million.

As the BoG emphasizes, "the avoidance of borrowing is attributed to the increase in house prices, which discourages initiatives to acquire a home, despite the subsidizing of the new interest rates for housing loans offered by the banks."

In its recent monetary policy report, the BoG noted that in the first quarter of the year, the total amount of new...