Greece, new homes to lose up to 40% of their value

House prices in Greece are set to drop to levels unseen since the turn of the millennium within the next couple of years, as properties are expected to lose up to 40% of their market value compared with the third quarter of 2008, their peak period, according to a recent analysis by Fitch. The study by the international financial services firm - as daily Kathimerini reports - showed that prices will drop another 17% by the end of 2014 on top of the 20% decline seen in the last four years. The latest Bank of Greece data available, for the second quarter of the year, indicate that the prices of newly built homes have posted a 10.8% decrease from the same period in 2011, while older dwellings saw their prices shrink 9.7% year-on-year. This means that builders and construction firms, the main sellers of newly built apartments, have begun to realize they have to lower their asking prices in order to find buyers. Estate agents say that depending on the cost of the house, the area and the financial state of the seller, reductions could reach up to 50% of the original price, which translates into an amount of 50,000 to 90,000 euros on average. This reflects the desperate situation many builders now find themselves in.