Real estate auctions under the new legal framework
 Real estate auctions under the new legal framework

Real estate auctions under the new legal framework

Foreign investors are seeking returns between 15% and 25% within the next three - five years.
RE+D magazine

Changes concerning the way of determining the auction price of a property after a barren tender without a previous court decision provided until now by law, but also the possibility of joint bidding, ie the acquisition of a property by more than one new owner either naturally or legally persons recently voted in Parliament.

Themistoklis Bakas

President, E-Real Estates

Those changes, which are now a law of the state, "may" cause initial concern, but in the near future, depending on the pace - number of auctions and the types of real estate to be auctioned, as well as the profile of interested legal and natural persons will want to acquire real estate through the above process, it can be either a momentary reversal of the upward trend of sales prices recorded for the fourth consecutive year, or potential homeowners-investors to focus on the search for real estate through the auctions that are now becoming more "attractive ».

It is worth mentioning that according to reports, the Funds / receivables management companies already have mortgages in their portfolios that correspond to 300,000 properties of borrowers.

The initial bid has always been such in order to protect the debtor, otherwise, there would be no reason to predict. Instead, auctions would be conducted with free bids. Now, according to the new bill, if the auction becomes barren it is repeated with the same first bid price and on a date set by the auctioneer, within forty (40) days, posted on the relevant auction publication websites (Bulletin Judicial Publications of the Electronic National Social Security Agency (e-EFKA) and 6-SUPPLEMENTS (e-auction).

If the next auction is also declared barren, a new one is held with a first bid price equal to fifty percent (50%) of the originally set price and in case it is still barren, then you conduct with a first bid price equal to sixty five percent (65%) of the originally defined.

To conclude, we can understand that if in the Greek real estate market there is the possibility of reducing the initial market / commercial value of the auctioned property to be reduced by 35%, we understand that depending on the number - pace and types of real estate, the real estate market will come " face "if the statements of the head of the receivables management company are valid, with 50,000 properties that will be available through auctions every year for the next five years at prices reduced even by 35% from the free market prices. Which, of course, made it a point to hit the domestic real estate market.

Let's not forget that most foreign real estate investors, whether natural, legal entities or private companies, want investments that can yield returns of 15% -25% within the next 3-5 years, either through immediate renovation and resale, or due to the upward trend of the real estate market, especially in areas where there is a strong investment interest due to the renovation projects, new line 4 of the metro, etc. be reduced by as much as 35% of the free market.

At the same time, due to the automatic reduction of the first offer even 35%, the debtor will eventually lose his asset at a lower price, with the risk of continuing to owe the lender, if the auction has not covered the amount of the debt.