My house 2: bell to distort the market – cautious buyers

The signs of the market are growing that the much -publicized program « My Home 2 » is not moving on, as it has fed hope for acquiring cheap housing that it is unable to fulfill.

« This year ‘debt’ is not sold at the inflated prices that most owners are demanding, » notes Elias Papageorgiadis, analyst and investor in the real estate market. As Head of the More Group, he regularly publishes data and primary research on the industry and has communicated with hundreds of interested parties.

As he tells us, the interest of the candidates for « My Home 2 » may be large, but gradually deflates as the obstacles accumulate.

According to unofficial data from a large bank, 25,000 applications for subsidized loans were filed last week for real estate worth 2.4 billion euros. Of these, 20,000, almost 80% had received pre -approval of eligibility. Much less were the real estate commitments, just 1,700, worth about 200 million euros.

This does not mean that those who have arrived there will receive a loan. It simply means that these candidate borrowers (only 8% of those who received pre -approval) have identified the home they want to obtain and have provided the electronic building identity, a prerequisite for the process to proceed.

They then have only three months at their disposal, until the transaction is completed and the loan contract is signed. Otherwise, if there are delays in the checks, for example, due to technical and legal obstacles as it is often the case, they lose their priority and go back to a row.

Mr Papageorgiadis’ estimation is that of the 1,700 commitments, half of them will not end up in buying, and will concern the majority of real estate outside Attica and Thessaloniki.

« Applications may approach 150,000, but in practice there are not many who seem willing to buy an old non -renovated home at any price, often with questions on his papers, » he notes.

Over -market real estate market

Speaking at IN, the analyst speaks of « over -the -real estate market », which was aggravated with « My House 2 ». A key element of distortion, highlighted by the Bank of Greece’s reports, as well as the IMF, is that real estate prices in Greece are increasing at multiple speeds than salaries and income, exacerbating imbalance and uncertainty.

According to Mr. Papageorgiadis, « My House 2 » contributed to the promotion of the real estate market in the following ways:

« Given the right to buy only 20 years of real estate, it has been targeted by hundreds of thousands of prospective buyers, in a market that already had three times more buyers than sellers, » he tells us. This mismatch is found in the latest « real estate barometer », published in November 2024.

« When hundreds of thousands target a small number of properties, their prices go artificially. Going up the prices of the old real estate (usually « debt », not renovated), the newest properties usually coincided with them, « the analyst continues.

At the same time, « the rise in prices for sale had the obvious effect of raising rents, which we warned months before and saw it happen this year, » he adds.

Is there a bubble in real estate?

The crucial question, which concerns not only sellers, brokers and prospective buyers-on-call, but also the whole of the Greek economy, is whether the real estate market has a « bubble » elements.

The answer is affirmative, at least in terms of real estate category in the program « My Home 2 ».

Prices of eligible properties have been launched, up to 30% in some cases compared to the period before the announcement of the program. After the end of « My House 2 » they are expected to retreat (if it does not follow my house 3).

The same phenomenon, artificial price rise, was also observed in « My House 1 ».

The example given by Mr. Papageorgiadis – based on real market elements – is indicative and outrageous:

An old property in Attica or Thessaloniki, which before « My House 1 » had a price of 60,000 to 80,000 euros, reached 130,000 to 150,000.

At the end of the program, the price fell to 110,000-120,000 euros (remaining again « inflated). When it was announced in « My House 2 », the price was up again, over 150,000 euros, and has now climbed to 180,000 to 210,000 euros!

Based on the above, we are talking about a launch of the demanded price of up to 300% in a depth of three years. This is the definition of the « bubble ».

However, analyzes of international financial firms, such as Capital Economics, insist that the real estate market in Greece is not a « bubble » – since mortgages are limited and the relatively small construction sector is limited. He argues that rising real estate prices creates a « virtuous cycle for the economy », as households feel richer (as the value of their home has increased) and thus enhance their consumption.

Who will break first, buyers or sellers?

What is now observed in the real estate market in terms of « My Home 2 » is that many prospective buyers-heads, discouraged by outrageous prices and the irrational requirements of the owners raise their hands high and undermine their decision.

We are in front of a peculiar « BRA de Fer », which sellers do not throw prices, but buyers « do not pinch ».

In the meantime, the real estate market has been broken into multiple individual markets, with different demand, purchasing public and each.

An indication that something is changing is that the properties requested at large (for the region) prices are slow to be sold. Buyers do not seem willing to continue to accept any price height – with the exception of privileged areas.