Greek Mortgage Market Shows Signs of Stabilisation - Fitch
Thursday, 01 January 1970
Fitch Ratings said the performance in Greek RMBS transactions is showing signs of stabilising, with mortgage arrears levels flat and new defaults occurring at a reduced rate in the third quarter of 2013.
The proportion of the loans that are in arrears by more than three months increased only marginally by 20 bps to 4.7%, following a period of more rapid increases, Fitch said. The constant default rate (a measure of the number of new loans defaulting) actually fell during the third quarter to 1.5% from 1.8% in the previous quarter.
House prices have continued to decline, however. Data from the Bank of Greece suggests that prices of new build properties (under five years of age) have been more resilient than prices of older properties (over five years of age), the rating agency said, adding that this is due to the more modern houses generally having better designs and specifications.
“Recoveries on defaulted loans continue to be extremely weak as the moratorium on lenders taking possession of certain categories of property remains in effect,” Fitch said. “The application of a new capital gains tax on properties may also further depress recoveries as well as prepayment rates.”