“Next year will be a turning point for the Greek mortgage market,” Theodoros Kalantonis, executive general manager of retail products and non-performing loans at Alpha Bank A.E. (ALPHA) told Bloomberg in an interview from his Athens office.
Mr. Kalantonis underlined that in 2015, “people will realize prices won’t fall any further, latent demand will continue to increase and banks will be more active in promoting new loans.”
According to Mr. Kalantonis, Greece’s four largest banks, encouraged as the economy claws itself out of recession, plan to double mortgage lending this year and may do it again in 2015.
“All this will be happening in a steadily improving macro-economic environment,” Theodoros Kalantonis said, adding that “borrowers’ attitudes will change when they see there is light at the end of the tunnel and they will be more willing to renegotiate.”
The Greek banker also noted that Greece’s four biggest banks aim to boost home lending to a total of 500 million euros to 600 million euros this year.
Home loan originations in Greece plunged from 15 billion euros at the peak in 2007 to less than 250 million euros ($340 million) last year, he said.
“In 2010, after Greece became the first country in the euro region to receive an international bailout, the government froze foreclosures on homes with outstanding mortgage debt of 200,000 euros or less”, he said.
“We see more foreclosures coming because it’s practically zero now,” Kalantonis clarified. “But we’ll only go after people in cases where we have strong evidence that they can pay, but have chosen not to….We will increase foreclosures but in a gradual and careful way, so as not to create a problem for the market,” he added.
Kalantonis said his bank will negotiate with distressed borrowers to restructure their loans or offer to let them stay in their properties and pay whatever they can while the lender seeks a buyer for their homes. “We studied the Spanish experience very carefully and we don’t want to repeat the mistakes they made,” he said.
Source: Bloomberg
