Real estate: sharp price increases in Greece are causing disagreements - What the European Systemic Risk Board and the IMF think.

Greecein recent years has raised the question of whether this is a normal phenomenon or an imbalance that could threaten financial stability. Recently, the European Systemic Risk Board (ESRB) and the International Monetary Fund have given different answers to this question. The ESRB, founded in 2010 to prevent systemic risks to financial stability in the EU, published an updated report on housing sector vulnerabilities in European Economic Area member states on February 1. It noted that despite Greece's strong price growth of 14% in the second quarter of 2023, prices remain “undervalued”.

It also noted the long period of declining house prices, and concluded that theGreece- one of the few countries in Europe that “continues to be considered low risk” regarding the impact of the housing sector on financial stability. The organization states that the measures taken for financial stability in Greece are considered adequate and sufficient. However, they also note that “authorities should continue to monitor vulnerabilities and consider imposing credit restrictions as preventive measures to maintain healthy borrowers.” Interestingly, while the ESRB believes that house prices in Greece are underpriced, the IMF estimates that they will be overpriced in 2023 using two indicators: the price-to-income ratio and the price-to-rent ratio. The IMF also points out that certain aspects need to be closely monitored.