ATHENS – Greece’s lingering economic crisis has virtually ground lending, especially for mortgages, to a near-half with figures showing home loans have fallen dramatically.
In the January-March period, housing loans in the entire domestic banking system amounted to just 75 million euros. A senior bank official told Kathimerini that no more than 750 mortgage loans were issued in the first quarter of this year, compared to the “golden era” of 2006-07 – before the start of the financial crisis – when 800 mortgages were issued every day on average.
That has fallen to little more than 80 as banks have seen depositors yank out 28 billion euros in the last six months amid fears the country could be forced out of the Eurozone and back to the drachma, leaving almost nothing left to lend out.
At the same time, Greeks beleaguered by austerity measures have been reluctant to borrow, robbing banks of lucrative mortgage contracts that bring in three times or more the initial outlay.
Banks now apply much stricter criteria when weighing whether to give mortgages and are said to be requiring down payments of up to 25 percent the cost of a home, prohibitive for many would-be customers.
Demand mostly concerns housing loans of between 80,000 and 100,000 euros, for properties costing between 100,000 and 150,000 euros, although demand remains from the country’s wealthy, many of whom keep their oney in foreign accounts and have largely escaped sacrifice or cost during the crisis.