A new study has confirmed suspicions that taxation and debt are prompting Greeks to sell off property they spent previous generations amassing.

Property ownership has fallen for the first time in decades, and half of all Greeks don’t think it’s worth buying property any more. The likely result: a massive sell-off to overseas buyers.

The latest study by the Hellenic Property Federation has found that:
· Ownership has fallen by 7.7 per cent during Greece’s 10-year economic crisis, to 74 per cent
· Forty-two per cent of Greeks would rather buy, versus 49 per cent who’d rather rent
· Three-quarters of landlords have lowered rents during the crisis, yet half of all renters remain in arrears with payments
· One third of owners plan to sell in the next two years, three times the pre-crisis figure
· Three-quarters of owners find crisis-era austerity taxes on property unfair.

The real estate market has suffered a series of blows since the beginning of the Greek debt crisis in 2008:
1. ENFIA, a single property tax was introduced in 2011 to offset falling income tax revenues. It is meant to raise €2.65bn a year, but often raises more. Property-rich but cash-poor Greeks have been forced to sell properties at bargain rates to raise money to pay the tax.

2. As unemployment rose to a high of 28 per cent in 2013, rented residential and business properties were left vacant. The combination of the economic depression and property tax meant that ownership became a liability rather than an asset. Many properties went up for sale, flooding the market and further depressing prices.

3. The depression also created a rise in non-performing loans, many of them mortgages. These now stand at just €105.2bn, or 60 per cent of GDP, according to Bank of Greece figures. The banking system plans to reduce these by €40.2bn by the end of 2019. Much of this – €11.5bn – will come from liquidations, meaning a dumping of loan collateral on the real estate market this year and next. A further €7.4bn will come from sales to debt collectors, likely leading to further foreclosures. The government has, at the behest of the Eurozone and International Monetary Fund, taken property auctions out of physical courts and put them online in its 15 January Omnibus Bill, where no amount of protests can delay or stop them.

4. The short-term rental platform Airbnb gave Greek owners temporary relief. These rentals have, until now, been essentially tax-free, offering a lifeline to owners who have been able to reschedule mortgages and keep up with payments for the first time in years. But the Independent Public Revenue Authority (AADE) is now launching a platform for such rentals to be registered and taxed by as much as 45 per cent. The expected tax income is €57 million. Airbnb income averaged AUD$3,580 per registered Greek property last year, the company says.

The combined pressures – property tax, inability to find paying renters, the commencement of foreclosures in earnest and the closure of tax loopholes – mean that a slate of Greek property will come on the market this year and next. According to Bank of Greece data, residential property prices fell by 40 per cent between 2007 and 2016. Whether this round of selling further depresses them remains to be seen.