The ambitious initiative to utilize 25,000 properties currently held by banks and loan management companies is being reactivated. The government has now authorized funds and servicers to move forward with the sale of these properties, even if all urban planning and legal procedures have not been fully completed.
These properties, obtained through auctions, have remained unutilized due to various bureaucratic, planning, and legal challenges. With the right conditions, this substantial reserve could be a lucrative opportunity for the market, providing much-needed relief to the housing sector.
A significant barrier is the slow processing time at the Land Registry, where property registration can take up to two years, creating uncertainty for both investors and citizens.
The period from when a property is bank-owned to when it is available for market sale ranges from eight months to four years, impacted by planning and legal complexities, unauthorized constructions, and issues of co-ownership.
Property Overview
In recent years, the situation has deteriorated, with banks acquiring nearly 80% of successfully auctioned properties. This has led to an increasing backlog of properties that are challenging to bring to market, resulting in high management costs and missed sales opportunities.
Industry estimates indicate:
- Piraeus Bank and Intrum manage around 10,000 properties,
- doValue oversees approximately 3,500–4,000,
- National Bank of Greece has about 4,000,
- Eurobank manages roughly 1,800–2,000,
- Alpha Bank and Cepal handle about 2,500–3,000.
The remaining properties are managed by other banks and servicers.
From the rough total of 25,000 properties, fewer than 500 are fully legalized with no unresolved compliance issues (such as excessive building space or semi-outdoor areas). An estimated 10,000 more could be sold immediately, even with outstanding issues, provided buyers are informed about the necessary legal actions and timelines.
Property Distribution:
- 60% are situated in Athens and Thessaloniki,
- 20% in other major urban centers,
- 20% located in regional areas.
By type: - 55% residential,
- 30–35% commercial,
- 10% land plots and agricultural land.
The Government’s Strategy
The new plan introduces options for banks to finance buyers of auctioned properties, allowing the property itself to serve as collateral. This encourages participation from smaller investors and individuals previously constrained by high capital demands.
The strategy addresses four key phases of the currently lengthy property acquisition process:
- Pre-auction marketing and publicity process (1–6 months)
- Auction process (1–12 months, depending on the round)
- Legalization and maturation of the property (12–18 months)
- Commercial utilization (6–36 months)
Proposed key interventions to shorten completion times:
- Reducing the time between auction rounds to one month through legal reforms, technological enhancements, and automation—especially for properties facing prolonged delays.
– Coupled with earlier price reductions beginning in the second round.
– Currently, price cuts of 15% and 20% occur only in the third and fourth rounds, resulting in 2–3 months of delay between rounds. - Introducing special loan products from banks for property buyers.
- Expediting the resolution of legal challenges and appeals to minimize delays and enhance process efficiency.
- Assigning legalization responsibilities to the buyer, in exchange for discounted purchase prices.
- Allowing technical compliance tasks to be deferred to the buyer post-purchase, with assistance from the property manager (servicer) to be completed within a specified timeframe (e.g., 12 months).
– This can be incentivized with price reductions for post-purchase compliance. - Establishing a legal framework for debt-to-asset swaps, facilitating debtors to offer an alternative asset to the bank in return for regaining ownership of their original home—with transparency and incentives for all parties involved.
A Centralized Property Platform
All properties will be accessible on a centralized online marketplace, providing detailed status updates, current maturity phase, and estimated completion timelines. The platform will also feature advanced search tools to enhance user experience.
Through these initiatives, the government and banks aim to significantly expedite the utilization of these properties, stimulate the real estate market, and alleviate pressure on housing prices.
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